Brisbane, Aug 28, 2008 AEST (ABN Newswire) - Leading Australian coal seam gas producer Queensland Gas Company Limited (ASX:QGC)(PINK:QGSCF) today announced record financial results, including net profit after tax (NPAT) of A$244.6 million and underlying NPAT of A$30.6 million.
KEY POINTS
- Cash at bank increased 184 per cent from A$248.3 million to A$704.0 million
- Total revenue increased 135 per cent from A$34.4 million to A$81.1 million
- EBITDA increased 543 per cent from A$4.9 million to A$31.5 million
- Net profit after tax (NPAT) increased by A$256.8 million to A$244.6 million
- Underlying NPAT increased by A$36.6 million to A$30.6 million
- QGC equity reserves increased by 73 per cent from 1,120 PJ to 1,932 PJ
- Gas sales increased 92 per cent from 11.5 PJ to 22.1 PJ (QGC share)
Total revenue for QGC in its second full year as a producer increased by 135 per cent to A$81.1 million with gas sales revenue more than doubling to A$55.1 million1 from sales of 22.1 PJ compared with A$27.0 million and 11.5 PJ in FY2007.
The increase in gas sales revenue was partly due to QGC taking advantage of a strengthening price for gas on the spot market.
Total revenue for QGC in the financial year was further boosted by $22.9 million in interest from QGC's cash at bank.
The company received $664 million from BG Group in April 2008 on completion of two key transactions related to the joint Queensland Curtis LNG Project (QCLNG).
EBITDA (earnings before interest, tax, depreciation and amortisation) soared by 543 per cent to A$31.5 million, compared with A$4.9 million in FY2007.
The headline NPAT of A$244.6 million follows the transaction with BG Group, which purchased 20 per cent of QGC's acreage for a total consideration of about A$415 million, resulting in a large net gain on sale.
Managing Director Richard Cottee said the outlook for FY2009 is excellent as QGC increases its production capacity and widens its exploration and development footprint in the Surat Basin.
The record results were achieved in an exceptionally active 12 months in which QGC joined with BG Group in an alliance to export liquefied natural gas (LNG) from a plant to be built at Curtis Island, near Gladstone. Final Investment Decision (FID) is expected in 2010 for a project with a potential capacity of 12 million tonnes a year of LNG.
In the year to 30 June 2008 QGC also pursued a strategy to increase its coal seam gas (CSG) reserves by making a friendly takeover offer for Roma Petroleum, securing a stake in Victoria Petroleum and laying the groundwork for last week's agreed takeover offer for Sunshine Gas.
1 The $55.1 million from gas sales excludes revenue from 0.6 PJ of gas sold but not delivered under take-or-pay contracts.
The additional reserves being targeted by QGC will be used to further the Company's domestic strategy to develop gasfired power stations such as QGC's Condamine Power Station, which is on schedule for commissioning in early 2009.
A concerted program of exploration, development and production in the year to 30 June 2008 resulted in capital expenditure of about A$192 million and the drilling of a record 109 wells compared with 59 in FY07.
The program produced outstanding results across QGC's world-class acreage in southern Queensland. Proved and Probable (2P) reserves grew 73 per cent from 1,120 PJ in 2007 to 1,932 PJ following the most recent upgrade at the end of June 2008 by independent certifiers, Netherland Sewell & Associates, Inc.
The combined QGC/BG Group 2P reserves total 2,415 PJ with QGC owning 80 per cent of the acreage and BG Group owning 20 per cent since the completion of key transactions in April 2008.
QGC, which was promoted to the S&P/ASX 100 index in late June, would have 100 per cent-owned 2P reserves of about 2,400 PJ and 3P reserves of almost 7,000 PJ in the event of the agreed takeover of Sunshine being completed.
"We have enjoyed a year of remarkable growth across every measure at a time when domestic and international demand for cleaner sources of energy is driving massive investment in the sector," QGC Managing Director Richard Cottee said today.
"There will be no pause for QGC and we take nothing for granted. Exceeding our targets has been a hallmark of QGC.
"We have high expectations for reserves, production capacity, infrastructure and power station development for the next 12 months and beyond."
Chief Financial Officer Ian Davies said today: "With more than A$700 million cash in the bank at 30 June, the Company is in an excellent financial position.
"QGC has the means and the resources to implement its vertical integration strategy to supply a cleaner fuel for QGCowned gas-fired power stations in Australia, and for the QCLNG Project with BG Group."
QGC and BG met the revised gas sales target of 23 PJ for the 12 months (up from FY2007 total sales of 11.5 PJ).
QGC's share, including 0.6 PJ of gas sold but not delivered under take-or-pay contracts, totalled 22.1 PJ.
Outlook for the 12 months to 30 June 2009
- Record investment in exploration, production and development for the next 12 months across existing and new acreage.
- Strong upgrades of 1P, 2P, 3P reserves and contingent resources across existing and new acreage with QGC targeting 2P reserves (QGC/ BG Group combined) from existing acreage of 3,400 PJ by 1 July 2009.
- Increased production capacity to support growth and demand.
- Solid gas sales and revenues with the opportunity to take advantage of strengthening spot prices - QGC will determine its production based on pricing signals.
- Development of gas storage alternatives to enhance supply options in the lead-up to delivery of about 190 PJ of CSG to QCLNG, which has initial demand for a single production train producing 3 to 4 million tonnes a year.
- Increasing momentum across the business and operations platform in preparation for QCLNG, which has been given 'Significant Project' status by the Queensland Government.
- Further agreements with councils and industry for the beneficial use of water from QGC's coal seams.
- Commissioning in early 2009 of Condamine Power Station. The first stage of the 140 MW power station is scheduled to be completed by February 2009, when QGC expects to start commercial sales of open-cycle generated electricity to the National Electricity Market.
Operational highlights since January 2008 (including events since 30 June 2008)
- QGC drilled 22 wells during the June quarter for a record annual total of 109, eclipsing the previous record of 59 drilled in FY2007.
- On 20 August 2008, the Boards of QGC and Sunshine Gas announced an agreement for an offer by QGC for all the issued shares in Sunshine. The offer, if accepted, would increase QGC's 2P equity reserves by more than 24 per cent, its 3P equity reserves by more than 19 per cent and expand its acreage three-fold to about 40,000 square kilometres.
- On 5 August, QGC announced that Managing Director Richard Cottee had committed to remain in the position until 30 June 2014 - at least six months after the first scheduled production in late 2013 of LNG from QCLNG.
- On 31 July, QGC announced that it had secured effective control of Roma Petroleum in its friendly takeover offer of 10 June. At 27 August, QGC had received acceptances in respect of 78.03 per cent of shares on issue.
- On 15 July, QGC and BG Group announced that QCLNG had secured Bechtel Oil, Gas and Chemicals, Inc. as the project contractor. The decision started the Front-End Engineering and Design (FEED) process for a twotrain LNG project.
- On 1 July, independent certifiers Netherland, Sewell & Associates Inc. confirmed higher estimates of QGC/BG's coal seam gas reserves. At 30 June, 1P (Proved) reserves had risen 28 per cent to 609 petajoules (PJ) since 18 December 2007. 2P (Proved and Probable) reserves were up 83 per cent to 2,415 PJ and 3P (Proved, Probable and Possible) reserves had risen 130 per cent to 7,163 PJ. QGC's share is 80 per cent.
- On 27 May, an agreement was announced with two other consortium members to examine the feasibility of the consortium building and owning a 400 to 600 megawatt (MW) gas-fired power station in NSW. The plant would supply electricity to between 320,000 and 500,000 homes and create 400 to 600 jobs.
- On 27 May, QGC announced that a proposed new Queensland to Hunter Pipeline would start from QGC's Berwyndale South processing plant and continue more than 800 kilometres to Newcastle in NSW.
- On 19 May, QGC announced that a new peak production record had been achieved with 105.2 terajoules (TJ) processed in 24 hours from fewer than 100 wells. This marked a 20 per cent increase from the previous high.
- On 1 February, QGC and global energy major BG Group announced an alliance to develop coal seam gas into LNG for export to higher value overseas markets. The alliance's QCLNG Project will be built to have potential capacity to produce up to 12 million tonnes a year of LNG from Curtis Island, near Gladstone.
Contact
Information for Media:
Mr Hedley Thomas
General Manager
Communications and External Relations
Direct: +61 7 3020 9043
Mobile: +61 417 797 419
ASX Contact:
Mr Mark Anning
Company Secretary
Direct: +61 7 3020 9012
Information for investors:
Mr Ian Davies
Chief Financial Officer
Direct: +61 7 3020 9040
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