During 2018 Custodian was among the top 10 performing UK...
TAG Oil (TSE:TAO) recently published results for the financial year to March 31, 2018. The company reported revenues up 1.4% at C$23.67mln, and operating netback per barrel of oil equivalent (see table footer for definition) of C$30.66 versus C$24.88 in the previous year. Oil and gas production was 1,120 boe (barrels of oil equivalent), coming primarily from TAG Oil’s core producing assets in the Taranaki basin, New Zealand.
These results were achieved in spite of a number of material operating challenges in the year:
Having navigated a challenging year, TAG Oil enters FY Mar2019 in a position to achieve increased production, and to capture the benefit of a higher oil price.
Some specific issues affected the profit & loss (P&L) in Q4, leading to an operating netback of C$26.42 per boe, which was down 39% year-on-year. This reflects the costs of the engineering issues that arose, but also the one-off effect of IFRS 15 accounting, which effectively pushes C$970k of revenue recognition out of Q4 and into the new financial year. IFRS 15 does not have any negative impact on FY Mar2019 expectations.
The company has guided for a production rate of 1,300 boe/day for 2019, reaching a run-rate of 1,700 by the year end. The capital budget for FY Mar2019 is C$12.4mln versus C$24.2mln in FY Mar2018, with the production increases coming from low-investment in-field production optimisation at existing sites.
We also note that the Brent Crude oil price is currently US$20 higher than the average level over the 12 months to March 2018. This, together with the planned production increases, supports a strong revenue increase in 2019e. We believe that TAG Oil is now positioned for renewed growth not just in 2019 but over the coming years.
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During 2018 Custodian was among the top 10 performing UK...
There has been no change in the company's trading...