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NZOG resumes dividend

NZ Newswire logoNZ Newswire 23/08/2016 Paul McBeth

New Zealand Oil & Gas says it will resume dividend payments after clamping down on costs in response to the slump in global energy prices.

The Wellington-based company declared a fully imputed final dividend of 4 cents per share on Wednesday.

NZOG didn't pay dividends in the 2015 financial year when it wasn't generating imputation credits.

The shares rose 4.1 per cent to 51 cents, having increased 15 per cent this year.

The energy exploration firm reported a net loss attributable to shareholders of $29.8 million in the 12 months ended June 30, more than doubling from a loss of $14.4m a year earlier.

The bottom line was hit by a $29.8m impairment charge on the value of Cue Energy, and NZOG's own cost-cutting measures will be taken up by the Australian business.

"The company is able to reinstate dividends because we have tightly controlled costs in a period when lower oil prices drove asset valuations lower," said chief executive Andrew Knight, who leaves the company at the end of this week.

Revenue increased 2.4 per cent to $119m, bolstered by a full year of contributions from Cue Energy, in which NZOG took a 48.1 per cent shareholding in 2015.

Operating and investment cash flow more than tripled to $21.1m, leaving NZOG with cash and equivalents of $96.8m at the June 30 balance date. The company will pay about $14.1m in dividends.

Operating costs rose 31 per cent to $48.3m, largely due to increased production and sales marketing spending.

The company had started to manage its exposure to oil prices and carbon emission costs through modest hedging and spent $1.5m on carbon emissions in the year.

Exploration and evaluation expenditure fell 11 per cent to $21.5m and the company is scaling back spending in Indonesia where it plans to realise returns from its investment.

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