Net profit for the six months was $2.3 million - the same result achieved for the previous corresponding period in 2006.

Mosaic's total production of 211,000 barrels of oil equivalent was lower than the previous result of 215,000 barrels.

Revenue for the period also dropped to $9.36 million, down from $9.7 million.

Mosaic chairman David Herlihy said the half-year result reflected the higher output and sales of natural gas, but lower production and sales of LPG and oil/condensate from the company's Surat-Bowen Basin operations.

"The results continue a trend of maintaining our revenue since the December 2003 half-year, and reflect the company's overall commitment to maximise production from its current facilities," he said.

"This is a strong platform which our exploration and development program will build on."

Mosaic is about to kick-off its 2008 drilling program, aimed at boosting production in the Bowen Basin.

The accelerated drilling program is due to start early this month and has the potential to impact positively on the company's operational and financial performance for fiscal 2008.

CS Energy farm-in

In other company news, Mosaic has agreed to supply CS Energy with up to 20PJ of gas from PL 202 until March 2013.

Under this deal, CS Energy will pay to drill and, if necessary, complete two horizontal wells in the Waggamaba up to a cost for $7 million in 2009.

In return, CS Energy will receive 50% of any gas production and 35% of the associated free oil and condensate production from the two wells.

Mosaic will keep the remainder.

CS Energy also has the right to fund two additional horizontal wells at the field this year under the same terms, as well as two wells in PL 202.

The agreement also covers the continuing supply of gas under Mosaic's existing gas sale agreement with CS Energy until 2010.