Australia and New Zealand focused oil and gas producer TAG Oil Ltd (TSE:TAO) reported increased revenue and operating netbacks in the year to end March, as it continues to eye low-risk production growth in its current financial year.
The junior oiler said revenue increased by 1% to C$23.7mln versus C$23.3mln last year.
Operating netback, the measure of oil and gas sales revenue after royalties, production and transportation expenses are removed, increased 23% in the year to C$30.66 per boe (barrel oil equivalent) compared with C$24.88 per boe (barrel oil equivalent) for last year.
Average net daily production decreased by 7% to 1,120 boe/d (barrels of oil equivalent per day) compared with 1,200 boe/d (barrels of oil equivalent per day) in 2017.
As at the end March, the firm had C$1.8mln (March 31: C$21.6mln) in cash and equivalents and C$3.4mln (March 31, last year: C$25.9mln) in working capital and no debt.
"During fiscal 2018 we focused on our waterflood program, exploration drilling and ensuring we maintained our production assets," said chief executive Toby Pierce.
"Despite an average Brent Oil price of $57.52 over the year, we still achieved operating cash flow of $8.7mln.
"In fiscal 2019, given the continued strength in Brent Oil pricing, our main focus will be on low-risk production growth, our waterflood program and adding to our exploration portfolio in New Zealand and Australia.
"I believe that we are in a better position to grow again after managing our way through this prolonged period of low oil prices and significant commitments.
"I am looking forward to FY2019, which I anticipate will be significantly better in terms of Brent Oil pricing, production and growth than the previous two fiscal years."
Earlier this month, TAG unveiled its latest NI 51-101 reserves assessment on its producing oil and gas assets in New Zealand, which showed a C$15mln increase in NPV (net present value).
These assets are at the Cheal (PMP 38156), Cheal East (PEP 54877) and Sidewinder (PMP 53803) permits in New Zealand and the report from Equipoise Ltd (ERCE) is with effect from March 31 this year.
Its total gross proven plus probable (PP) reserves as at March 31, reflecting its 100% interest in PMP 38156 (Cheal), 70% interest in PMP 60291 (Cheal East) and 100% interest in PMP 53803 (Sidewinder), are estimated at 4.079 MMboe (million barrels of oil equivalent) compared with 4.143 MMboe (92% oil) at March 31 last year.
For the current fiscal year, the company's capital budget is C$12.4mln, which will be predominately funded by forecasted cash flow and working capital on hand.
This includes C$9.7mln of discretionary expenditures that are contingent mainly on sustained production and oil prices.
The company will focus on low-expenditure, in-field production optimization opportunities, which include supplejack-1 commercialization at PEP 57065 (Sidewinder North), the continued optimization of Cheal A site and Cheal E site waterflood programs, and the field development plan advancement for PEP 51153 (Puka).
TAG reckons 2019 revenue from operations will be $32.7 million, with production averaging approximately 1,300 boe/d (75% oil).
It expects to exit the year with production of around 1,700 boe/d.
TAG shares dropped 3.8% to stand at C$0.38