25/08/2008 - 13:08

Hedging values cut into Amadeus earnings

25/08/2008 - 13:08

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Oil and gas producer Amadeus Energy Ltd's bottom line has been impacted by adjustments to its hedge portfolio, with the company reporting a full year net loss of $1.3 million.

Oil and gas producer Amadeus Energy Ltd's bottom line has been impacted by adjustments to its hedge portfolio, with the company reporting a full year net loss of $1.3 million.

In its report, the company said the non-cash fair value adjustment to its hedge portfolio amounted to $32 million, which must be written as an expense in the income statement according to regulations.

On a brighter note, Amadeus said that since year-end, spot oil prices have dropped about 20 per cent, and should those levels existed at the end of fiscal 2008, the fair value adjustment would have been lower at about $16 million.

"Should current prices continue at these levels then the fair value adjustment will reverse in the period to 31 December 2009," the Perth headquartered company said.

The hedges were put in place as part of a bank lending arrangement that was necessary to acquire the White Eagles properties for $58 million in 2005.

In fiscal 2007, Amadeus reported a net profit after tax of $3.1 million.

Meanwhile, underlying net profit after tax of $27.1 million, up 233 per cent from the previous year, while basic earnings per share were 15 cents, up from 4.5c.

Revenue from operations rose 30 per cent to $68 million with net sales from oil and gas, after payment of royalties, up 54 per cent to $69 million on the back of increased gas production and higher commodity prices.

Earnings before interest, tax, depreciation and amortisation from operations was up 39 per cent to $44.6 million.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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