Australian oil and gas producers see losses widen

PERTH (miningweekly.com) – Operating revenues of Australian oil and gas producers fell by more than 20% during 2015/16, compared with the previous financial year, as falling commodity prices struck the bottom line.

In a new industry financial survey, the Australian Petroleum Production and Exploration Association (Appea) notes that oil and gas operating revenues reached A$23.7-billion in 2015/16, compared with A$30-billion in the previous year, while the industry reported a net operating loss of A$4.5-billion for the same period, compared with a loss of A$600-million in 2014/15.

Despite the significant deterioration in the industry’s overall profit and loss position, total tax payments remain strong, estimated at A$4.3-billion for 2015/16, compared with A$5.2-billion in 2014/15.

Appea CEO Dr Malcolm Roberts on Monday said these results were a timely reminder about the challenges that a highly capital-intensive industry, which depends on commodity prices, has to deal with.

“Comparing the years 2014/15 and 2015/16, the industry saw the average price it received for the sale of oil and gas fall from $A69.10 to $A48.63 on a barrel of oil equivalent basis,” he said.

“The fall in realised prices, coupled with a reduction in Australian oil and condensate production, creates a challenging framework for the industry.

“Exploration remains at historically low levels, and the return on invested funds is a critical source of new investment capital. Yet tax payments have remained high, dispelling the myth that the industry is not paying its way.”