Austral said yesterday that though exploration costs had decreased, the significantly increased production expenses meant the overall 2007 loss was $US8.62 million ($A9.44 million) greater than that of 2006.
Exploration expenditure was down from $US8.17 million in 2006 to only $US3.23 million last year.
Exploration expenditure in 2007 mainly involved 2D seismic in the Papua New Guinea permit (PRL4), finalisation of costs associated with the 2006 onshore Taranaki Ratanui-1 dry hole, inventory for the nearby planned Kahili-2 appraisal well later in 2008, and preparatory costs in advance of the onshore Taranaki Cardiff-2A well workover.
Expenses incurred in the Cardiff workover were not included in exploration expenditure but had been capitalised pending the results.
Austral said in mid-March that the well would be shut-in for a further four weeks, following disappointing initial gas flows from the key Eocene-aged K3E zone.
Austral yesterday said that the $US14.20 million increase in 2007 expenses reflected the company moving into the first year of permanent Cheal production, with costs relating to this amounting to $US2.48 million.
Depletion costs of $US4.03 million increased as a result of the significant increase in production from Cheal, together with the capital cost associated with the construction and commissioning of the field.
Meanwhile, oil sales increased from $US0.91 million to $US7.33 million for 2007, as a result of Cheal starting permanent production, coupled with higher world oil prices.
Austral's average sales price increased from $US60.21 per barrel in 2006 to $US80.33 in 2007. However, realised hedge losses of $US1.03 million reduced that to $US69.04 per barrel last year.
Operating cashflows, before financing and investing, also improved from a loss of $US8.21 million in 2006 to a loss of $US3.63 million in 2007.
Again, increased Cheal production and reduced exploration expenditure helped reduce these negative cashflows.
Austral invested a total of $US25.23 million in 2007, about $US15.52 million on Cheal, about $US1.71 million on Cardiff, and about $US7.66 million on buying International Resource Management Corporation out of Cardiff, thus increasing Austral's stake from 25.1% to 44.9%.
