Despite receiving higher oil prices due to a reduction in the cost of hedging, Stuart’s sales revenues for the period were $20.4 million, a decrease of 24%.
This reflected its production, which at 287,000 barrels of Cooper Basin light sweet crude oil, was well down on the previous corresponding period’s total of 390,000bbl. The fall was due partly to deferment of Derrilyn production due to downstream constraints (Derrilyn was down 56,000bbl on previous corresponding period). But the bulk of the drop was because of natural field decline at the Worrior field (down 107,000bbl).
Yet Stuart announced a net profit after tax of $6.2 million for the half year ended December 31, a 132% increase over the previous corresponding period.
This was because it spent less on exploration and reversed a write-down on impairment of assets after managing to increase its oil reserves.
The boost in oil reserves was Stuart’s greatest success in the last half. It increased by a net 623,000 barrels to 2.78 million barrels at 31 December, a 28% increase after production since 30 June 2006.
Reserve additions were recorded at the Padulla oilfield following fracture stimulation, installation of jet pumps and improved production during the half year. More than 300,000 barrels of oil reserves were added compared to a total of 44,000bbl recorded at June 30. As a result, $5.28 million (before tax) previously expensed, was written back to profit during the period.
Exploration delivered a 50% success rate for Stuart in the last half with discoveries at Revenue-1, Might & Power-1 and Dunoon-2 offsetting failures at Light Fingers-1, Tawriffic East-1 and Rising Fast-1.
The company was bullish on further exploration.
“Stuart is currently incorporating the results of its recent drilling activity into its prospect portfolio together with results of recent seismic re-processing,” managing director Tino Guglielmo said.
“Work to date has improved the company’s understanding of faulting in the areas studied. When completed, this work is expected to enable Stuart to more tightly target its next round of exploration drilling.”
In July, Stuart farmed out interests in PEL 93, based on results from an airborne geochemical survey to Red Sky Energy, which has nominated 12 prospects of interest in PEL 93 and will fund 98% of the cost of drilling each well to earn 49% equity in the prospect. A prospect 6km southwest of Pando South-1 will be the first target to be drilled by Red Sky.
Stuart said in addition to expanding its Cooper Basin exploration and production, it is also evaluating opportunities outside the region. In addition, it is moving ahead with groundwork and key commercial arrangements for its Cooper Basin diesel refinery, which is intended to supply the region’s booming resources sector.
