New Zealand Oil & Gas Sales Surge After Field Starts Production

By Gavin Evans

July 31 (Bloomberg) -- New Zealand Oil & Gas Ltd., the country's biggest publicly traded explorer, posted a more than 50-fold increase in sales in the year ended June 30 after production from an offshore field beat forecasts.

Sales rose to NZ$234.6 million ($172 million), from NZ$4.2 million a year earlier, the Wellington-based company said in a statement today. That's higher than the average NZ$228.5 million among four analyst estimates compiled by Bloomberg News.

New Zealand Oil & Gas owns 12.5 percent of Tui, the country's first offshore oil project in 11 years. Tui has pumped 15.2 million barrels of oil since production began a year ago, with output running about 12 months ahead of the original schedule. The field has estimated reserves of 50.1 million barrels, almost double initial projections.

The company ``is on a very sound financial footing and we are focused on maximizing value from our existing assets, as well as identifying attractive new investments,'' Chief Executive Officer David Salisbury said in a statement to the stock exchange. ``This includes looking beyond New Zealand, as the opportunities currently available here are too few.''

Sales from Tui bolstered fourth-quarter revenue to NZ$80.9 million, the company said, without giving a year earlier figure.

New Zealand Oil & Gas gained 6 cents, or 3.9 percent, to NZ$1.59 at 11:00 a.m. in Wellington.

The explorer, the second-biggest gainer in New Zealand's benchmark stock index this year, received NZ$190.8 million from shareholders last month after rising oil prices made it profitable for investors to exercise 128.5 million options.

Including those funds, the company has about NZ$280 million of cash invested in short-term bank facilities with several institutions rated by Standard & Poor's at AA or better, Salisbury said.

To contact the reporter on this story: Gavin Evans in Wellington at gavinevans@bloomberg.net