Ann: HALFYR: NZO: Half Year result - Six months t

• Release Date: 19/02/14 11:15
• Summary: HALFYR: NZO: Half Year result - Six months to 31 Dec 2013
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					NZO
19/02/2014 09:15
HALFYR

REL: 0915 HRS New Zealand Oil and Gas Limited

HALFYR: NZO: Half Year result - Six months to 31 Dec 2013

o Gross profit steady
o EBITDAX up 13%
o Growth through increased Tui stake and Woodside partnership

New Zealand Oil & Gas will pay shareholders an unimputed interim dividend of
3 cents per share on 4 April 2014.

The company today announced an operating performance in line with
expectations for the six months to 31 December 2013.

Gross profit for the half year was $26.713 million compared to $26.616
million in the first half of the 2012-13 financial year.

EBITDAX (earnings before interest, tax, depreciation, amortisation  and
exploration expenses) increased 13 per cent to $31.414 million for the
half-year, up from $27.868 million in the comparable previous period.

Revenue increased by 7 per cent to $51.419 million from $47.869 million in
the same period mainly as a result of a full period of production and sales
after the maintenance shutdown at Kupe last year. Total production increased
20 per cent to 0.6 million barrels of oil equivalent, (MMBOE) up from 0.5
MMBOE. Net operating cash-flow of $52.274 million rose from $25.233 million
in the comparable previous half-year mainly due to timing of receipts for oil
shipments in June, lower taxes and royalties, and insurance proceeds related
to the Kupe asset.

The purchase of an increased share of production from the Tui oil fields in
Taranaki, at a cost of cost $7.733 million, led to slightly higher sales
revenue.

Operating costs were $24.706 million compared to $21.253 million in the
comparable previous half-year. Operating costs excluding amortisation were up
8 per cent to $11.334 million from $10.454 million, while amortisation grew
to $13.372 million from $10.799 million in the same period last year due
mainly to last year's maintenance shutdown at Kupe.

The company had no debt and $164.211 million of cash at 31 December 2013,
compared to $170.997 in cash 12 months previously. Net profit after tax was
$4.003 million, including an unrealised foreign exchange loss of $2.4 million
pre-tax.

EXPLORATION
Spending on exploration and evaluation was up significantly, to $23.747
million from $10.526 million, as New Zealand Oil & Gas expanded its portfolio
and was involved in more exploration activity compared to the previous
period.

GROWTH
The company has a very strong balance sheet and is able to use it to pursue
three avenues to grow returns for shareholders.

1. Building out the portfolio.
Three new offshore permits were awarded in the 2013 New Zealand Block Offer.
In the Vulcan permit off Taranaki, and Toroa in the Canterbury-Great South
Basin, New Zealand Oil & Gas partnered with Woodside, a significant step in
the company's strategy of being the partner of choice for exploration in New
Zealand.
Also in the Canterbury-Great South Basin the company was awarded the Galleon
permit, adjacent to its existing Clipper interest.
Two permits, Kakapo and Kanuka in offshore Taranaki, were surrendered.
In late December a consortium in which the company has an interest was
awarded a new production sharing contract, Palmerah Baru in Indonesia.

2. Ensuring we maximize value within existing exploration assets by
developing new prospects within existing acreage.
During the period New Zealand Oil & Gas took over as operator in the Clipper
permit in the Canterbury-Great South Basin and conducted a successful 650
square kilometre seismic survey in December.
The company participated in drilling the Matuku well.
Meanwhile analysis has begun on the results of two wells in Indonesia, which
produced oil and gas shows during drilling in the Kisaran production sharing
contract.

3. Adding value to existing producing assets by ensuring they are fully
developed and all opportunities are explored.
New Zealand Oil & Gas more than doubled its share of the producing Tui oil
fields, from 12.5 per cent to 27.5 per cent, by acquiring a 15 per cent share
from Mitsui E&P Australia Pty Limited. Cash returns are expected to repay
this investment within a short period.
The company is currently participating in drilling in the Pateke-4H well in
the Tui fields, which will be immediately followed by the Oi well (at a
reduced equity level of 18.75 per cent with the option to restore full equity
in any development subject to reimbursement of pro-rata costs and payment of
a buy back premium.)
The company has begun to assess opportunities for further development of
resources within the producing Kupe asset. Prospects for further recovery in
Kupe are still at a conceptual stage, and we expect they will be developed
further over the next 12 months as resource size and commercial potential are
analysed and tested.

John Pagani
External Relations Manager
+64 21 570 872
End CA:00247154 For:NZO    Type:HALFYR     Time:2014-02-19 09:15:15