Gas Week

EWN Publishing

Queensland Gas suffers $12.2 million loss, compared with a $6.3 million loss a year earlier, despite 11-fold sales increase

Posted by gasweek on 21 September, 2007

According to Stephen Wisenthal in The Australian Financial Review (20/9/2007, p.17), Queensland Gas’s net result for the first full year of production from its fields west of Brisbane was a $12.2 million loss, compared with a $6.3 million loss a year earlier. Eleven-fold rise in sales: Sales rose 11-fold to $34.5 mil­lion, as the company sold 11.6 peta­joules of gas, almost double its original forecast of 6 petajoules. The company is on track to meet its target of selling 30 petajoules this year, and 60 petajoules in 2008-09, managing director Richard Cottee said. AGL Energy has made a strong gain on its $327 million payment in March for a 27.5 per cent stake in Queensland Gas at $1.60 a share, which trumped the Santos offer.

AGL wants early gas deliveries: Queensland Gas isn’t due to start delivering gas to AGL until January, under a $1.5 billion sales contract but AGL has already indicated it would like the gas sooner, Cottee said. The company was expanding pro­cessing capacity at its 100 per cent-owned Berwyndale South field to 60 petajoules a year and building a similar-sized plant at the Argyle project it shares with Origin Energy. Cottee said Queensland Gas’s net share of the production capacity would be more than 90 petajoules a year, but it was only forecasting output of 60 petajoules, based on conservative estimates of what its drilling program would deliver from its fields.

QG keen to change prime land to production licences: It was also spending $56 million to drill wells on its “Walloon fairway” of highly productive coal-seam gas fields, before it had to start relinquishing some of its explo­ration acreage in two years. Queensland Gas aimed to convert as much of its prime land as possible to production licences, which gave security of tenure, Cottee said. Its target was proved and prob­able reserves of 1600 petajoules by the end of June, and substantially more than that by the end of December 2008. Queensland Gas has already con­tracted 48 petajoules out of its planned 60 petajoules of production in 2008-09. The company is currently produc­ing at an annual rate of 23 peta­joules, up from a rate of 18 peta­joules in June. And it has been achieving prices 10 per cent above its budget in the first two months of 2007-08 because of the strong spot market, Cottee said.

The Australian Financial Review, 20/9/2007, p. 17

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