High-octane result for Novus outweighs Indonesian rumblings
Tuesday, September 5 2000 - 02:30 AM WIB
Diverse oil and gas investor Novus Petroleum is confident its West Natuna gas project will remain isolated from Indonesia's racial troubles.
The project, to supply gas to Singapore under long-term contract, is running ahead of construction schedules and could be contributing to Novus's cash flow in the first quarter of next year.
Company officials said yesterday that as West Natuna, in which Novus holds 25 per cent, was located well offshore, it was believed it would not become a target for groups in the troubled Aceh province.
Novus managing director Bob Williams said the project was likely to be the next cash cow, particularly as under the arrangements with the Indonesian Government, initial earnings were slated to repay development costs.
Yet, until the Indonesian Government gave effect to its promise to international financial institutions to reduce subsidies for liquid fuels, the potential from the Wunut gasfield off Surabaya would not be fully realised.
Dr Williams was briefing analysts following Novus's announcement of a 352 per cent increase in half year earnings -- from $3.4 million to a record $15.4 million.
Operating cash flow rose to $64.4 million but the company warned this was not typical as part of it represented greater than expected uplift from Indonesian production.
Sales revenue jumped from $38.9 million to $91.2 million as the company benefited from higher oil prices, the average of which rose from $US13.29 a barrel oil equivalent in the first half last year to $US26.33 in the latest period on production increased by 35 per cent to 4.3 million barrels.
The result included six months production from both the Western Desert gas scheme in Egypt and the Cooper Basin.
Novus benefits to the full extent of international oil price movements as it does not hedge its share of production from fields in Oman, Egypt, Indonesia and Australia.
But it was hit by the falling Australia dollar because its borrowings are in US currency.
Novus shares drifted after reaching a near record $1.92 and closed at $1.87, down 3c. (*)