Net Revenue Up, Operating Results Turn Positive
WELLINGTON, New Zealand, Aug. 15 /CNW/ -- Austral Pacific Energy Ltd.
(TSX-V: APX; NZSX: APX)
Austral Pacific announces $2.78 million in net revenue in the second
quarter representing a 123 percent increase in net revenue over the 1st
quarter results. This was due to an increase in oil sales from 27,160 barrels
in the March quarter to 35,681 barrels for the June quarter, and an increase
in oil price received by removing the oil price hedge.
Austral Pacific chief executive Thom Jewell said, "This quarter's results
are a stepping stone for the Company. Operating results, which we define as
oil sales income against direct expenses of royalties, production costs and
G&A, are positive for the first time. Although our accounting results show a
loss for the quarter, the company has made progress toward one of its key
targets for 2008."
Austral reported an accounting loss for the quarter of $2.529 million,
compared with a loss of $3.243 million for the same quarter in 2007. The loss
includes the final impact of oil sales hedged in 2006 at $65 per barrel and
non-cash expenses of depletion of reserves and depreciation of production
facilities. The loss was mitigated by the gain on sale of its Papua New Guinea
The company received world oil prices (averaging some $136 per barrel)
for its June crude oil sales. The May 2008 close-out of the oil sales
contracts required Austral to borrow a further $17.8 million. However, the
increased revenue for current production adds positively to the bottom line,
and the company is no longer exposed to penalties if monthly production
volumes do not meet the previously contracted levels.
Production from the Cheal oil field totaled 42,812 barrels for the June
quarter (Company share: 29,754 bbl). During June, average daily production was
417 barrels, although annual maintenance and testing programs will reduce that
amount during July and August. The recently drilled A7 well has the potential
to increase production to some 650 barrels per day.
During the second quarter, the company continued to implement its stated
-- In disposing of non-core/non producing PNG permits, the company raised
$8.5 million cash. These permit sales reflect its strategy to reduce debt and
focus its activities in New Zealand by growing the Cheal and Greater Cheal
assets, drilling the Kahili-2 well and further investigating a technical
solution to unlocking the deep gas at Cardiff;
-- Two wells were drilled in the Cheal oil field, resulting in the
successful A7 well and a sub-commercial field extension well at the A6
location. The A7 well is expected to be on-stream by the end of August 2008;
-- Continuing cost containment included staffing reductions, and reducing
the company's stock exchange listings from three to two leaving one in North
America and one in New Zealand, thereby significantly reducing future
compliance costs. Operating costs for the first six months of 2008 averaged
$89/barrel including the cost but not the benefit of substantial one off legal
and restructuring costs.
Mr. Jewell commented that the results at Cheal A6 and A7 will not only
add to Austral's revenue stream, but also advance its understanding of the
field size and production capability.
"These recent results will guide our production enhancement studies,
which aim to increase the recovery from the existing wells. It will also help
to target additional reserves by identifying the best drilling opportunities
in the company's prospect inventory on adjacent permits," he said.
"Austral's return to the fundamentals is showing results. The company
will continue its approach throughout 2008 with the intention of building its
production, likely through both enhanced recovery techniques and additional
drilling in late 2008 and early 2009. We are still facing a working capital
deficit of some $15 million but we believe that with nearly two million boe
(barrels of oil equivalent) of 2P reserves, a reduced cost structure and some
excellent near term exploration prospects, we should be able to refinance this
deficit by year end.
In other corporate news, the company has granted a total of 80,000 stock
incentive options at an exercise price of $0.49 to Rhys Humphries -- New
Plymouth Operations Manager and to Jeanette Watson -- Corporate Secretary, All
such options are granted for a five-year term, vesting in three equal amounts
over 18 months.
Web site: http://www.austral-pacific.com
Phone: Thom Jewell, CEO +64 (4) 495 0880 or Brad Holmes +1 (713) 304 6962
Neither the TSX-V nor the NZSX have approved or disapproved the contents
hereof. This release includes certain statements that may be deemed to be
"forward-looking statements" within the meaning of applicable legislation.
Other than statements of historical fact, all statements in this release
addressing future production, reserve potential, exploration and development
activities and other contingencies are forward-looking statements. Although
management believes the expectations expressed in such forward-looking
statements are based on reasonable assumptions, such statements are not
guarantees of future performance, and actual results or developments may
differ materially from those in the forward-looking statements, due to factors
such as market prices, exploration and development successes, continued
availability of capital and financing, and general economic, market, political
or business conditions. Please see our public filings at http://www.sedar.com
and http://www.sec.gov/edgar/searchedgar/webusers.htm for further information.
For further information:
For further information: Thom Jewell, CEO, +64 (4) 495 0880, or Brad
Holmes, +1-713-304-6962, both for Austral Pacific Energy Ltd.,
email@example.com Web Site: http://www.austral-pacific.com