Austral Pacific Energy Ltd. Chief executive Thom Jewell said the company recorded a loss of $6,567,884 for the quarter ended March 31, 2008. The majority ($4.4 million) of this figure relates to non-cash components associated primarily with unrealized derivative losses and depletion. The underlying performance of the company is strong.
The company has made significant gains over the period resulting in a reduction of its liability from $49 million to $32 million and managing its short term financial challenges by restructuring its loans and reduction of its long term debt from $18 to $14.5million with a further reduction to $11 million expected during the second quarter.
The company has also been successful in monetizing one its non-core projects in Papua New Guinea at an opportune point in its value cycle. "We will continue to high grade the portfolio of assets with disciplined capital spending, divestments and additions as warranted," said Jewell.
The Cheal field continues to pump cash into the organization. The Company's 69.5% of the Cheal field has produced 35,931 barrels of oil and generated net revenue of $2,817,267 during the quarter.
Jewell said, "the individual wells are performing as anticipated and I am confident that we will be able to increase both the reserves and the total field production with additional drilling. We are also pleased with the performance of the A1 well which is the first producing well from the shallower Urenui sands overlying the entire Cheal field. Bringing this well on stream this quarter and will allow us to realise additional reserves and production for the field."
Two additional wells have been prepared and could spud before the end of this month. While these wells are targeting incremental reserves, the facilities are designed to allow successful exploration, appraisal or development wells to be converted to producing wells and put on stream rapidly. More than 10 additional drilling locations have been targeted to extend the play trend beyond the existing field but within the permit area over the next two years. These wells if successful may be produced through the world class production facilities that are now in place and operating smoothly.
"We have a staged forward work program which will be funded out of existing funds, future production revenue and by raising additional capital." Jewell said. "This program includes further work on Cheal to increase reserves and subsequent production, and development of the Kahili and Cardiff assets."
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