i will try to explain the accounting for you

OK folks, a few things to consider for you all. Even as a trained accountant it takes a while to understand it all. Some points to note.

1. It is critical in an oil and gas situation like this that you focus on the cashflow and not the accounting entries/books. PPP is making exactly the same gross profit proportionally as NZO on Tui. They have to pay 20% royalty and 30% NZ company tax, just like NZO does.

2. PPP does not have the same amount of NZ tax losses available as NZO does, so they have more NZ company tax to pay and this means less cashflow. NZO will soon exhaust its losses and will be back in the same position as PPP on Tui.

3. They are spreading the royalty EXPENSE across the period of the project, but there has not been any physical royalties paid, nor are they due yet, because for royalty accounting purposes, all expenses are deducted 100% up front.

However, PPP are running an accounting set of books under normal accounting rules and are looking more at the whole life of the project in their aqccounting for Tui. This is a little unusual, but they have chosen to treat it like this. I suspect it may have something to do with Aust corporate tax (esp as to what is and is not deductible) and this is why NZO have not done this as they are a NZ company.

4. Both the taxation and royalty figures are at present book entries only in PPP's books. THERE IS NO CASH EFFECT FROM THESE ENTRIES.

5. You are better to study the cashflow statement for the true position.

6. For the lay investor, focus more on the quarterly reports and the cash figures, not the accounting reports. You will never understand the accounting reports.


If there is anyone here who actually thinks they only made $9M for the quarter, please understand that this is not the case. All you need to focus on each quarter is how much more cash do they have and how much loan has been paid off.

The failure to pay a dividend is by directors' choice and not by a lack of profits.