Oil and gas growth for Drillsearch

Oil and gas producer Drillsearch has doubled its production target for the year ahead, leading to a surge in its share price. It has also announced a record profit of $45 million in the 2012/13 financial year, resulting from its new operating oil pipeline in South Australia’s Cooper Basin - a profit more than four times higher than the $10 million of the previous year.

The company says it will boost production to between 2.3 million and 2.5 million barrels of oil equivalent (mmboe) in the 2013/14 financial year.

“The major driver for the increase in production is the continued development of the Bauer oil fields,” Chief Financial Officer Ian Bucknell said.

“This more than doubling in production is driven by the annualising of the current high rates of production on the western flank oil production and assuming that minimum wet gas contract levels will be produced.”

Drillsearch achieved production of 1.1 mmboe in the 12 months to June 30. Oil production now makes up almost 90% of the company’s revenues, and higher oil prices have boosted its profit.

The company plans to increase capital expenditure to between $90 million and $110 million in the 2013/14 financial year, up from previous estimates of between $75 million and $100 million.

Drillsearch shares gained four cents, or 3%, to $1.375.

Source: Yahoo!7 Finance Australia.