16/05/2008 - Oil and gas company Austral Pacific Energy has reported a $US6.57 million ($A7.05 million) first quarter net loss.
Announcing the result on Thursday, chief executive Thom Jewell said $US4.4m of the loss for the three months to the end of March related to non cash components associated primarily with unrealised derivative losses and depletion.
The underlying performance of the company was strong, he said.
The results for the latest period compared to a net loss of $US2.22m for the corresponding period in 2007.
Gains in the March 2008 quarter included a reduction in the company's liability from $US49m to $US32m, Jewell said.
Austral was managing its short term financial challenges by restructuring its loans and reducing its long term debt from $US18m to $US14.5m, with a further reduction to $US11m expected during the second quarter.
The company's 69.5 percent stake in the onshore Taranaki Cheal field produced nearly 36,000 barrels of oil and generated net revenue of $US2.82m during the quarter.
"The individual wells are performing as anticipated and I am confident that we will be able to increase both the reserves and the total field production with additional drilling," Jewell said.
"We have a staged forward work programme which will be funded out of existing funds, future production revenue and by raising additional capital."
That programme included further work on Cheal, and development of the onshore Taranaki Kahili and Cardiff assets.
Austral said its cash balances and working capital were not sufficient to fund all of its obligations for ongoing work programme requirements related to its exploration permits.
In addition, it was in breach of several covenants relating to its Investec Bank (Australia) loan facility following delays in completing the Cheal project in accordance with established timelines.
Management's plans for securing sufficient sources of liquidity included rectifying the covenant breaches relating to its loan facility with Investec, Austral said.
There was also the conditional sale of assets in Papua New Guinea for $US3.5m, as well as a mix of further capital raising and/or sales of joint venture interests.
"The company has prepared a cash flow forecast which leads management to conclude that the company can continue to meet its ongoing obligations for a reasonable period of time," Austral said.
Source: AAP NewsWire
