Petsec said today that its production for the current December 31 half year was expected to rise by more than 50% on the back of the recent production start-up from the Vermilion 258 gas field.

The Vermilion field was discovered late last year and has provided a significant boost to Petsec’s total net production. Currently from its Gulf of Mexico operations Petsec is producing around 24.3 million cubic feet of gas equivalent (MMcfe) per day.

“Operating cash flow, which was $13.3 million in the six months to 30 June is also forecast to be up some 50% in the current six months,” said Petsec’s executive chairman, Terry Fern.

“The cash flow generated by the company during the latest period came from the production of 2.2 bcfe from the West Cameron 343/352 field in the USA” Fern said.

“In the current half, we are forecasting increased production to be within the range of 3.3 bcfe to 3.8 bcfe – a rise of more than 50% on the June half output.”

In the June 2004 half- year results which were released today, total revenues were $20 million, net operating cash flow was $13.3 million and a profit before tax of $ 1.2 million.

Earnings were impacted by a rising Australian dollar against the US dollar, the expensing of two wells in China and higher depreciation, depletion and amortisation.

Petsec invested $19.5 million in the latest June half year to bring the recent Vermilion 258 discovery to production, drill three wells in China and further develop the West Cameron field.

The company also acquired three new leases during the period - Vermilion 244 and 259, and Main Pass 19 - two of which are expected to be drilled this year.

Net cash on hand at the end of the period was $12.7m.

The company also outlined a further expansion of its Gulf of Mexico exploration and development operations in the current half.

Fern said Petsec’s expected second half drilling program would include two development wells on Vermilion 258, commencing in September/October 2004.

These would be followed in November/December by a one to three well program on the newly-acquired Main Pass 19 lease to test targets that hold potential for a net 12 to 15 bcfe