Ann: HALFYR: NZO: Half-year result

• Release Date: 18/02/15 09:06
• Summary: HALFYR: NZO: Half-year result
• Price Sensitive: No
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					NZO
18/02/2015 09:06
HALFYR
PRICE SENSITIVE
REL: 0906 HRS New Zealand Oil and Gas Limited

HALFYR: NZO: Half-year result

Sales of gas are continuing to sustain strong, positive cashflows which New
Zealand Oil & Gas is using to focus on acquisitions against a background of
lower oil prices affecting valuations.

Revenue for the six months to 31 December 2014 was up 5.2 per cent to $54.1
million from $51.4 million a year ago.

Revenue figures were primarily driven by additional volumes from the
company's larger share of the Tui asset for the duration of the current six
month period and the timing of shipments, but significantly lower oil prices
largely offset any volume gains.

Revenue from the Kupe asset in the six months was $31.4 million from
production of around 450,000 barrels of oil equivalent(1), compared to $38.0
million a year ago from 472,000 barrels in 2014 and $31.2 million from
368,000 in 2013.

Revenue from Tui was $22.7 million in the half year from around 227,000
barrels of oil sold, compared to $13.4 million a year ago from 97,000 barrels
sold, when the larger share was only included in three months' production,
and $16.6 million in 2013 from 82,750 barrels sold. Revenue is affected by
the timing of shipments.

Gross profit for the six months was $20.9 million compared with $26.7 million
in same period last year. The increase in operating costs was the result of
the greater stake in Tui and the lower New Zealand dollar.

For the six months to 31 December, EBITDAX(2) (earnings before interest, tax,
depreciation, amortisation and exploration expenses) was $28.3 million,
compared to $31.4 million in the first half of the previous year.

A net loss of $10.5 million was recorded for the six months after the Tui
asset was written down by $13 million because of lower oil prices. In the
same period last year the company announced a net profit after tax of $4.0
million.

Despite lower oil prices, the company expects gas sales volumes and prices to
provide continued positive cashflows, while revenue will be further supported
by additional production from the Pateke-4H well. The Pateke operator expects
work to begin in March to connect Pateke-4H to the Tui floating production
vessel, with first oil now anticipated as early as April.

CEO Andrew Knight says despite the effects of lower oil prices the underlying
business is sound with positive cash flows.

"Oil prices affect revenue and the Tui valuation but our revenue from gas
sales has not been affected in the same way. I expect the business's
performance to continue to be fundamentally sound with our mix of assets and
the business overall remaining cashflow positive.

"The lower oil price has resulted in a number of assets coming to market.
This represents an opportunity to use our positive cashflows for acquisitions
where opportunities present value for shareholders."

The company intends to pull back on future exploration and expensed $13.5
million after returning two permits off Taranaki, New Zealand to the Crown.
The exploration spend for the half-year compares to $12.5 million in the
comparable previous period.

The company had no debt and $115.2 million of cash at 31 December 2014. On 20
February the company will return around $63.2 million of capital to
shareholders. It also used $14.7 million of cash to purchase a 19.99 per cent
interest in ASX-listed Cue Energy, and last week made a takeover offer of A10
cents a share.

FIGURES ARE NZD, except where stated.
(1) Barrels of oil equivalent have been calculated as the total oil
equivalent of the oil, condensate/light oil, natural gas and LPG figures,
using conversion factors consistent with Society of Petroleum Engineers (SPE)
guidelines, as provided below. Conversion factors used were: 163.40 barrels
of oil equivalent per terajoule of natural gas, 8.15 barrels of oil
equivalent per tonne of LPG.
(2) EBITDAX is a non-IFRS measure that is presented to provide an
understanding of the underlying operating performance of New Zealand Oil &
Gas Limited.  The measure represents earnings before interest, tax,
depreciation, amortisation and exploration costs (including impairment write
downs and abandonment) and reconciles with 'Net loss after tax' as follows:

H1FY15 H1FY14 FY14
NZ$ millions
Net (loss)/profit after tax (10.5) 4.0 10.1
Add back:
Income tax credit / (expense) (1.0) 1.2 7.3
Net Finance income / (costs) (2.8) 0.2 2.4
Exploration and evaluation costs expensed 13.5 12.6 29.5
Pre-permit expenditure (in Other Expenses) 0.1
Asset Impairment 13.1 - -
Amortisation & Depreciation 14.7 13.5 28.3
Amortisation within movement in inventory 1.2 (0.3) (2.2)
EBITDAX 28.3 31.2 75.4

John Pagani
External Relations Manager
+64 21 570 872
End CA:00260769 For:NZO    Type:HALFYR     Time:2015-02-18 09:06:47