Tap Oil See Record Profit in 2003

Tap Oil Limited has reported a net profit after tax for the year ended December 31, 2003 of $23.2 million, a 148% increase over the corresponding six month period to December 31, 2002 and almost matching the full year result to June 30, 2003.

Tap's Managing Director, Paul Underwood, said "Tap's record earnings were driven by a record six monthly liquids production of 1.32 million barrels of oil or 7,174 barrels per day net to Tap." "In addition, gross operating margins for the period were maintained at around 65% due to ongoing strong oil prices (A$44/bbl) and increased liquids production over relatively fixed costs."

"This result was achieved despite a write down in capitalized exploration expenditure of $1.8 million ($1.3 million after tax) and an unrealized foreign exchange loss of $3 million for the period, resulting from US dollars held on deposit."

"Record cash flows from operations of $47.9 million increased Tap's cash balances from $7.8 million at 30 June 2003 to $37.9 million at December 31, 2003."

New Developments to Positively Impact Future Earnings

"In addition to record operating revenues and profit, Tap's result also highlights a number of new development projects that are progressing and expected to contribute to future oil and gas production," Mr. Underwood said.

"The Linda gas/condensate field development is in progress and should be on-line by April 2004 and the Harriet gas plant capacity on Varanus Island is in the process of being doubled."

"The Kahili gas/condensate field development in New Zealand should also be on-line by mid year."

High Impact 2004 Exploration Program

Mr. Underwood said a potentially high impact exploration and appraisal drilling program was planned for Tap in 2004.

"Tap plans to spend around $25 million on exploration this year, with around 20 wells planned for Australia and New Zealand."

"The Harriet JV and Airlie Island acreage remains highly prospective for near term production increments with numerous wells scheduled and in planning. The existing producing Woollybutt Oil Field also has potential for upside should the step-out well planned for mid-year be successful."

Mr. Underwood said Tap's spend was fully funded with ongoing operating cash flows expected to maintain a strong balance sheet.

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