On an energy equivalent basis, Magellan’s share of oil and gas sales for the half-year fell by 4% to 697,043 barrels of oil equivalent from 726,859 barrels of oil equivalent in the previous corresponding period.
The company’s consolidated operating profit from ordinary activities before write off of capitalised exploration expenditure and income tax for the half-year was $3,224,000 – an increase of 46% from $2,212,000 in the previous corresponding period.
The main factor contributing to the $1,012,000 improvement was the increase in oil sales revenue resulting from higher average world crude oil prices.
Compared on a year-on-year basis, there was a $1,937,000 or 10% decrease in shareholders’ funds to $57,706,000 and the current asset ratio has decreased slightly from 4.6 to 4.4 mainly due to higher payables and provisions.
Magellan will be hoping for exploration successes to boost its reserves and put the company on a firmer footing.
The company spent $3,392,000 on exploration but had no significant successes.
During the half year, the company participated in three exploration wells – Hihi-1, Miromiro-1 and Karariki-1 – in the onshore Taranaki Basin of New Zealand, which targeted oil in the Mount Messenger and Moki Formations of the Taranaki Basin sequence. Neither well found commercial hydrocarbons.
In the Browse Basin, offshore Western Australia, Magellan participated in the South Galapagos-1 well in WA-306-P, which found no hydrocarbons. In two other Browse leases – WA-288-P and WA-311-P – Magellan and its co-venturer, INPEX (Alpha), chose to surrender exploration permits after the Strumbo-1 well, drilled by the parties in WA-288-P in 2003, downgraded the prospectivity of these areas.
In the Carnarvon Basin, offshore Western Australia, Magellan and Tap Oil continued the evaluation of WA-291-P area but could not farmout of the drilling of the Sheila prospect and Magellan withdrew from the joint venture.
But the dice could still roll Magellan’s way.
The company has several prospects in the Cooper Basin with exploration wells due to be drilled in South Australian leases PELs 95 and 110 in the first half of this year. Across the border, in the Queensland portion of the basin, Magellan has a 40.936% interest in ATP 267P, adjacent to the Nockatunga petroleum leases. Processing of the 3D seismic data from this lease has begun.
Further north, in the Maryborough Basin, Queensland, Magellan is evaluating the coal seam gas potential of the Burrum Coal Measures in ATP 613P.
Overseas, Magellan involved in a joint venture planning to drill the Sandhills-2 well on the Isle of Wight licence in southern England in the second quarter of 2005. The company also has stakes in eight leases in the onshore Weald Basin.
And in New Zealand, Magellan holds a 100% stake in two Great South Basin permits off the coast of the South Island, and evaluation of these areas is ongoing.
