Earnings before interest, tax, depreciation, depletion, amortisation and exploration expense (EBITDAX) more than tripled this financial year, rising from US$8.8 million (A$12m) in 2004, to US$27.8 million (A$36m) in the latest half year.

Company chairman, director and CEO Terry Fern said the average gas price received for the latest half year was US$6.82/Mcf, up 24% from the prior corresponding period, and EBITDAX margins of US$6.00/Mcf were 46% higher than in the first half of 2004.

“This demonstrates the very strong EBITAX margins of 88% net revenue which can be achieved in the Gulf of Mexico as a result of high US domestic gas prices and low cash operating costs due to extensive oil and gas infrastructure in the Gulf region,” Fern said.

Petsec production in the Gulf of Mexico increased by 115% to 4,637 million cubic feet of gas equivalent after three wells were drilled on Main Pass 19 during the half year. The energy company estimates that these wells have discovered 13 billion cubic feet equivalent of recoverable gas.

The success of these wells, combined with stronger US gas prices, has generated net oil and gas revenues of US$31.6 million for the company, up 165.5% from the US$11.9 million earned in the last half-year.

Petsec’s thriving profit margins were achieved despite the failure of two wells at Price Lake, onshore Louisiana earlier in the year. Although the wells were completed for production, mechanical difficulties caused significant financial losses and the wells failed to discover commerical hyrocarbons in their primary objective. Petsec has since withdrawn from this project.

The company has forecast a continued increase of production and profit in the Gulf of Mexico for 2006, with the expectation that production from Main Pass will start in the last quarter.