Kupe Production Station, near Hawera in south Taranaki. Photo / Supplied
Kupe Production Station, near Hawera in south Taranaki. Photo / Supplied
New Zealand Oil & Gas was back in the black and kept its dividend unchanged after reaping a $95 million gain on the sale of its stake in the Kupe oil and gas fields and trimming its operating and exploration costs.
The Wellington-based company reported a net profit to shareholdersof $61.2 million, or 20 cents per share, in the 12 months ended June 30, turning around a loss of $35.9m, or 8.6 cents, a year earlier, it said in a statement. The bottom line was bolstered by the $168m sale of its stake in Kupe, which saw a 25 per cent fall in revenue to $37.1m.
The energy and gas explorer has been cutting costs in response to the slump in global oil prices, while the exit from Kupe flooded its coffers which it plans to recycle into new prospects as global rivals quit more marginal exploration areas. NZOG's operating costs shrank 16 per cent to $15.9m and exploration costs fell 44 percent to $12.3 million.
"The main contributor to the net profit after tax was a gain on the sale of the company's 15 per cent stake in the Kup gas and light oil field," NZOG said. "Together with the disposal of the mature Tui interest, the company has successfully minimised its exposure to abandonment liabilities."
The board declared a fully imputed final dividend of 4 cents per share, payable on November 3 with a record date of October 24. That's unchanged from last year, and adds to the $100m share buyback which returned capital from the Kupe sale.
The shares rose 1.5 per cent to 69 cents, having already gained 7.4 per cent so far this year.
The earnings result comes as NZOG's biggest shareholder Zeta Resources plans a partial takeover to lift its stake to at least 50 per cent from almost 42 per cent now, offering 72 cents per share.
NZOG chair Rodger Finlay said the actual offer hasn't been sent yet, and that an independent response committee will make its recommendation once they've seen the formal takeover bid. Until then, the board stresses shareholders should wait until that document is received, he said.
Finlay said the energy explorer will exit lower priority Indonesian assets as it looks to generate better returns from its best assets in the south-east Asian nation, and also wants to squeeze more value from its 48.1 per cent stake in Cue Energy by stripping out "unnecessary and wasteful duplication of services".
