The company said newly introduced IFRS accounting procedures and a downgrade of reserves in the Harriet joint venture’s Linda gas field was responsible for the reduced profit.

Cash flow and future production outlook remained unchanged, as Tap attributed most of its downgrades to non-cash items.

It expected a revenue comparison with the previous six-month period to be adjusted, due to IFRS changes in how income was recognised. The company’s oil inventories in storage tankers at 31 December 2004 and at 30 June 2005 could not be considered income until it was transported into export tankers and issued with bills of lading.

Forecasted production from the Harriet joint venture in the Linda gas field has also been downgraded, following recent reviews that question the existence of a separate compartment accessed from the current well.

But Tap claims this revision was not expected to affect gas contract requirements, such as the Linda platform, which was installed to access and develop the Linda, Rose and Lee gas and condensate fields, as well as the recently completed and functioning Rose-2 development well.

In addition, a lack of available rig slots and seismic vessels has meant Tap was unable to acquire tax deductions from the Federal Government’s Petroleum Resource Rent Tax (PRRT) as exploration expenditure.

But Tap maintained its outlook to the end of 2005 was still strong, due to better timing, solid production and expectations that high oil prices will continue.

Meanwhile, the Woollybutt oil field has yielded strong production and reserve estimates have been revised upwards. Woollybutt-5 and Yarri-1 are due to spud late this month, while the Scalybutt-1 production well is expected to come onstream early December.

Tap advised that final profit figures would be released on September 9 2005.