The decision by Perth oil and gas producer Tap Oil to relinquish an offshore exploration permit in the Philippines has seen the company record an $18 million loss.
The decision by Perth oil and gas producer Tap Oil to relinquish an offshore exploration permit in the Philippines has seen the company record an $18 million loss.
Tap Oil's operating profit was up 54 per cent on the previous corresponding period to $19 million.
Executive officer Peter Strickland said this provided the company with a solid financial basis to underpin its upcoming drilling program.
"Tap is very pleased to have all three cash generating assets, Woollybutt, Harriet and the gas contracts, now performing strongly and profitably," Mr Stickland said.
"Excluding the $20 million write down due to relinquishing SC41 in the Philippines, the overall profit result is pleasing," he said.
See full company statement below:
The Company generated strong revenues of $33 million and an operating profit of $19 million for the half year.
These operating results are in line with the corresponding six months to 30 June 2009 and are up 54% and 62% respectively on the previous six months to 31 December 2009. Cash generated from operating activities was $14 million and the cash on hand at 30 June 2010 was $66 million.
Tap Chief Executive Officer Peter Stickland said the strong operating profit of $19 million, up by 62% from the 31 December 2009 half-year, provided Tap with a solid financial basis to underpin its upcoming drilling program.
"Tap is very pleased to have all three cash generating assets, Woollybutt, Harriet and the gas contracts, now performing strongly and profitably," Mr Stickland said.
"Excluding the $20 million write down due to relinquishing SC41 in the Philippines, the overall profit result is pleasing," he said.
"After undertaking much technical preparatory work, we are now prepared for an exciting and targeted drill program across prospects in Australia's Carnarvon and Bass Basins and in Brunei in the coming months."
Summary of Financial Performance
The Company generated strong revenues of $33 million and an operating profit of $19 million for the half-year. These operating results are in line with the corresponding six months to 30 June 2009 and are up 54% and 62% respectively on the previous six months to 31 December 2009. A full comparison of results is attached as Annexure 1.
Earnings before income tax, depreciation, amortisation and exploration write downs (EBITDAX) was $16 million which is up 68% on the corresponding six months to 30 June 2009 and down 39% on the previous six months to 31 December 2009. Both these comparative periods were distorted by nonrecurring costs such as Varanus Island repairs, Woollybutt dry dock costs and insurance proceeds received. Cash generated from operating activities was $14 million and the cash on hand at 30 June 2010 was $66 million.
The overall result was a net loss after tax of $18 million which included an exploration impairment charge of $20 million resulting from the relinquishment of the SC41 exploration permit in the Philippines.
The result for the half-year includes the following:
- Tap's share of oil production from Woollybuttt for the half‐year was lower than the corresponding half-year period by 17%. There was no production in the prior half‐year period to 31 December 2009. Woollybutt production resumed on 7 March 2010 having undergone a planned life extension program. In the half-year ended 30 June 2010 there was only one lifting and hence the volume of oil sold was 88,371 bbls compared to 184,231 bbls sold in the 30 June 2009 half-year period.
Correspondingly, the inventory levels were higher at 30 June 2010.
- Tap's share of oil and gas production from Harriet for the half‐year was higher by 8% and 22% respectively compared to the corresponding six months to 30 June 2009 and down 16% and 6% respectively on the previous six months to 31 December 2009.
- Exploration impairment losses of $20 million (2009: $6 million) reflecting Tap's ongoing evaluation of its exploration portfolio. The impairment loss relates to the relinquishment of the SC41 permit in the Philippines on 9 August 2010, resulting in the exploration carrying value of SC41 being reduced to nil.
- An income tax expense of $2 million (2009: benefit of $8 million) reflects Tap's current tax payable position, as well as the movement in the deferred tax balances.
