Ann: Drillsearch Energy Reports FY2015 Full-Year Results, page-8

From today's Oz

Drillsearch keeps its head above water as rivals sink


Drillsearch Energy has pulled off a rare feat among energy companies this reporting season, holding underlying profit steady among depressed prices and guiding to 50 per cent of cashflow-funded production growth, even if prices stay where they are.
Drillsearch expects to boost Cooper Basin production by 50 per cent in the next five years
Sydney-based Drillsearch reported full-year underlying profit of $57.8 million, down slightly from $58.5m the year before but up on market expectations of $35m to $40m. “We came out with a profit of nearly $60m, which was the same as last year, so that was a great outcome compared to our peers,” Drillsearch chairman Jim McKerlie told The Australian.
“It showed the quick and decisive action we took in adjusting to the market conditions meant we could retain that profit. “We managed our risk, we hedged early.”
Drillsearch hedged a sizeable chunk of production in December, meaning what would have been a received oil price of $89.50 a barrel for the year was boosted to $97.20, resulting in an extra $20.6m of income. The company increased its hedging two weeks after OPEC declared it would not hold up oil prices with production cuts and inspired what has so far been a 10month rout in oil prices.
Drillsearch reported a full-year net loss after tax of $8.1m, down from a profit of $41.9m in 2013-14 as it logged $110m of pre-tax impairments due to exploration write-offs and the value of Cooper Basin assets.
Shares in Drillsearch finished 7.5c, or 12 per cent, higher to 68c. But shares are still down 38 per cent in the past two months as investors abandon oil and gas shares, even a company such as Drillsearch, which has $176m in the bank.
Drillsearch said it expected to increase its Cooper Basin production by 50 per cent in the next five years, with capital expenditure to be funded from cashflow.
“That could go to 100 per cent increase with any upside at all in the markets, ” Mr McKerlie said.
Former managing director Brad Lingo left the company suddenly at the start of this financial year, apparently keen to return to running a smaller exploration company, which DrillSearch no longer is after his time at the helm.
Acting chief Walter Simpson said the company would look at opportunities outside the Cooper Basin, which “remains our core area of focus”.