“It’s a significant turnaround and reflects where the business is heading; the business has turned the corner,” NZOG chief executive Andrew Knight said this morning, referring to the latest financial results.
The Wellington-headquartered company this morning reported total operating revenue of $NZ116.4 million for the 2012 year, up from $NZ106.5 million the previous year, and a gross profit of $NZ63.6 million ($NZ52.7 million).
However, the 2011 bottom line result was severely impacted by the November 2010 explosions at the Pike River coal mine in which 29 men lost their lives. NZOG was a 29.4% shareholder in the Pike River Coal Company.
Knight said NZOG was concentrating on building a suite of petroleum exploration opportunities in New Zealand, Asia and North Africa, with that portfolio complementing its stakes in the producing offshore Taranaki Kupe gas-condensate and Tui oil fields.
Kupe (NZOG interest 15%) continued to underpin the company, producing 2.86 petajoules of sales gas, 12.5 tonnes of LPG and 0.69 million barrels of condensate for the company in the June 2012 year and earning NZOG $NZ74.3 million in revenue.
Tui (NZOG interest 12.5%) also continued to perform well, producing 276,000 barrels of oil for NZOG and earning $NZ42.0 million.
“We want to build a sustainable business . . . NZOG continues to build on opportunities in Indonesia, Tunisia and onshore New Zealand,” Knight said.
He said NZOG was making “strong progress” in building a portfolio of interests in onshore Sumatra, with its proven discoveries and good infrastructure, and in offshore Tunisia, with its good prospectivity and established exploration and production activity.
However, the company was re-entering onshore exploration in New Zealand, primarily Taranaki, after a decade-long absence as it retained “a strong commitment” to domestic exploration as a means of replacing depleting oil and gas reserves, and to grow the company.
He said offshore New Zealand exploration had specific risks as drilling activity was “lumpy”.
NZOG, which already has stakes in several offshore Taranaki leases, would not rule out some involvement in Anadarko’s proposed three-well deepwater program off Canterbury and in the Deepwater Taranaki Basin. That program is scheduled for the 2013-14 summer, if the right opportunities arose.
“However, there needs to be some balance and onshore New Zealand provides some of that balance”
NZOG will pay a fully-imputed annual dividend of NZ6c per ordinary share on September 28.
This article first appeared in ILN's sister publication EnergyNewsBulletin.net.