Petsec's 2003 profit turnaround was achieved on a dramatic increase in revenue, which climbed to $47.9 million in 2003.
Oil and gas revenues net of royalties, of $38.7 million, were generated from net production of 4.5 billion cubic feet of gas equivalent sold at an average price of US$5.60 per thousand cubic feet of gas. Production came predominately from the Company's three discovery wells on the West Cameron 343/352 leases, drilled in late 2002.
Net cash flow also grew strongly to $27.5 million compared to negative $3.2 million for 2002, the majority being invested in further development and exploration, primarily on the West Cameron 343/352 and Vermilion 258 leases in the Gulf of Mexico, and Block 22/12 in China.
Basic earnings per share also reflected Petsec's overall stronger performance, rising solidly to 21.5 cents per share compared with a 4.1 cents per share loss in the previous year. Cash at the end of 2003 was $16.8 million (previous year $2.3 million) which included $9.8 million of the net $11.6 million raised in a placement late in December of 12.8 million shares at $0.95 cents per share.
Further expansion in 2004
"In 2004, we intend to build substantially on the outstanding 2003 exploration, production and revenue performance." Petsec's Executive Chairman, Mr. Terry Fern, said.
"This will include further development and exploration in the Gulf of Mexico and the start of drilling this month of 2 to 5 wells in the Beibu Gulf, offshore China." Mr. Fern said. In 2003, in the Gulf of Mexico, USA, Petsec brought the three West Cameron 343/352 discoveries of 2002 into production and drilled another two discoveries which were brought into production late in 2003. Two wells were also successfully drilled on the Vermilion 258 lease in December and January 2004.
Mr. Fern said construction of production facilities at Vermilion 258 with an initial capacity of 45 million cubic feet of gas a day had begun for expected mid-year start of production. Additional prospects in the lease will be drilled following commencement of production.
Mr. Fern said that the 3D seismic survey shot over Block 22/12 in China late in 2002 was interpreted, outlining numerous prospects, and development economics were completed for the 12.8.1 and 12.8.2 oil fields which were discovered in 1993/94. This culminated in the design of a two to five well program which is expected to begin late this month to test mapped potential of 7.5 to 12.5 million barrels of oil net to the Company. The first well in the program will test the 12-7 prospect which has the potential for several tens of millions of barrels," he said.
"The second well will appraise the 12-8-2 oil discovery of 1994 which is estimated to contain 20-30 million barrels of recoverable oil."
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