Petroleum production for the six months ended December 31 averaged 8466 barrels of oil equivalent per day, up from 5929boepd in the first half of the year.

Arc said the record revenue followed "substantial contributions" from the Cliff Head and BassGas interests acquired from Wandoo Petroleum last June.

The $US189 million acquisition gave Arc an additional 24% stake in the Cliff Head oil field and a 12.5% stake in the Yolla gas field.

"Arc is ideally positioned with strong cash flows from assets that produce high operating margins in a time of record oil and gas prices," managing director Eric Streitberg said.

"We also have a very deep appraisal and exploration portfolio, which has the potential to double our reserves base in the short term."

In the financial report, the company said its operating business was very strong with earnings before interest, tax, depreciation and amortisation and write-offs (EBITDA) 45.1% higher at $56.6 million.

Despite this, net profit after tax (NPAT) dropped to $2.4 million from $2.8 million in the previous six month period - as a result of "a number of accounting charges."

"However, on an equivalent adjusted basis, NPAT was 60% higher than the comparable result for the previous period," it said.

Exploration expenditure totalled $14.3 million before tax for the half year.

Arc reiterated its belief that the internally funded exploration program going forward had "very high" potential, especially in the Canning Basin, onshore and offshore Perth Basin and the Bass Basin.

"The very encouraging initial results from our first wells in the Canning Basin and our ongoing technical work in the area have confirmed our initial view that Arc's interests in the Canning Basin have world-class hydrocarbon potential," it said.

"We will be strongly focused on organic growth during 2008, but remain alert to the asset and corporate opportunities that could arise from the current unique divergence between commodity prices and share market performance."