Exploration and production company Austral Pacific Energy's full year net loss almost doubled to US$43.8 million ($78.9 million) in 2008.
The company, which made a net loss of US$22m in 2007, is the operator of the onshore Taranaki Cheal oil field, in which it owns a 69.5 per cent beneficial
interest.
Last year oil sales increased to $11.8m from $7.3m in 2007, due to higher oil prices together with increased production volumes from a full year's permanent production at Cheal.
Austral said today it had continuing liquidity issues, but with the ongoing support of its lender, had embarked on a plan to reduce its cost base and refocus its activities around Cheal.
The reported loss for 2008 of US$43.8m was driven in large part by a write-down of the Cheal asset book value due to reduced reserves, an exploration expenditure write-off, and realised losses from settling forward oil sales contracts last May.
The reduction in Cheal reserves resulted from lower oil volumes due to the reduced thickness of the oil bearing reservoir encountered in the Cheal A6 well and a conservative recovery factor based on the well performance in the past twelve months, Austral said.
Chief executive Thom Jewell said the company expected to be able to perform well optimisation from cash flow.
"Given a stable production operation, we will seek additional investment for a well drilling programme to expand the field and produce additional resources that are not currently recognised in our independent reserves report," he said.
An initial loan of US$23m from Investec Bank was paid off during the year, but further borrowings to close-out the oil sales contracts in May and settling a gas prepayment liability in December left the company with a debt of US$16.8m at year-end.
Mr Jewell said that the financial statements noted, as they did last year, "significant uncertainty" in relation to the group's ability to continue as a going concern.
But the directors had expressed confidence that the company would be able to conclude a longer term plan with its bankers and continue in operation, he said.
- NZPA
