However, the company did flag spending cuts going forward.

Drillsearch managing director Brad Lingo said the company's liquidity "remained strong" despite the decline that saw its revenue fall to $70.3 million from $79.9 million for the three months ended September 2014.

The company had $149.2 million cash - down from $169.5 million at September 30 and $50 million of undrawn committed debt at December 31 - with the effects of the weaker crude oil market partially offset by production being up 6% from the September quarter, a weaker Aussie-US dollar exchange rate and hedging by Drillsearch.

"The company retains a strong liquidity position with $199.2 million of cash and undrawn working capital facilities at the end of the first half of FY2015," Lingo said.

In its oil business, Drillsearch and Beach Energy executed a six-well development campaign at Bauer on the Western Flank of the Cooper Basin expected to support oil production from the March quarter onwards.

This campaign includes the joint venture's first pad drilling which delivered four wells at significantly lower cost.

"Following that success, the JV has decided to bring forward an additional four development well pad drilling program, commencing later in the March 2015 quarter and aimed at maintaining production and improving operating flexibility," Lingo said.

Aside from the additional hedging the company announced on December 12 against the falling oil price, in the form of put options at $US70/barrel effective from that month, Drillsearch is undertaking a "comprehensive review of call capital and operating expenditure and business priorities".

With continuing oil price volatility through December 2014, the company has hedged 927,000bbl of FY2016 production in the form of $US60-90 dollars.

"Drillsearch also has the benefit of ongoing free carry in three of our JVs - the Western Cooper JV with Santos, in the Northern Cooper (PEL 570) JV with Santos and New Standard, and in the Inland-Cook Oil Fairway with beach," Lingo noted.

The Western Flank was still the main driver for the company's rising production, with a full three months of output from the Bauer 12 and 13 wells, the successful tie-in of Kalladeina, Congony and Sceale (KCS) and two further Bauer wells (14 and 15) during the period.

Drillsearch's average realised oil price for the December quarter was $96.50/bbl - 16% lower than the average $114.50/bbl the previous quarter - which the company put down to a 25% drop in average crude oil prices in US dollar terms, offset by the weakening of the AUD:USD exchange rate and hedging.