By Paul McBeth
New Zealand Oil & Gas has widened its first-half loss as it wrote down the value of its Tui and Maari investments and switched its accounting policy to cope with a cheaper oil environment.
The Wellington-based company, whose chairman Peter Griffiths unexpectedly resigned this month, posted a net loss of $27.6 million in the six months to December 31, compared to a loss of $7.7m a year earlier.
The latest loss included an $8.7m impairment charge on the Tui oil and gas field and a $26.8m charge on the Maari field.
They came after NZOG moved to a new method of accounting, which recognises all general exploration and evaluation costs as expenses as they're incurred.
Revenue rose 21 percent to $65.4m as Cue Energy Resources made a bigger contribution after being taken over last year, helping offset declines from NZOG's Tui and Kupe investments.
NZOG has adjusted its corporate strategy to deal with oil prices falling to the $US30 a barrel range from $US50 when it last reported and new chairman Rodger Finlay said the company intends to focus on cutting costs.
"Exploration costs have been minimised with no intention to spend further on exploration beyond our contractual obligations," Mr Finlay said. "The board intends to manage capital carefully and retain only capital needed for the company's strategy."
Chief executive Andrew Knight has previously said the firm is looking at acquisitions to take advantage of any bargains that might arise from the globally depressed oil price.
"Despite the write-downs of asset valuations, the underlying business is performing well and is cash positive with a strong balance sheet," Mr Finlay said.
The shares last traded at 43.5 cents and have increased 2.4 percent so far this year.