Gas producer Cue Energy has swung from a $17.3 million loss to a $7.7 million profit this year, after getting rid of its expensive oil operations in Indonesia.

This was in spite of production from its operations dropping.

Production from the New Zealand oil field Maari dropped, due to natural field decline and interruptions as work was done on the wells, to 360 barrels of oil per day (bopd).

And production from the Indonesian gas operations Oyong and Wortel dropped to 1.5 million cubic feet a day (mmcfd) and 2.8 mmcfd respectively, as they no longer include figures frome the shuttered oil field.

“The Oyong field now produces gas only, which is sold directly to the Indonesia Power facility… on long term fixed price contracts, which provides stable future revenues for Cue,” the company said.

“The conversion to a gas only project resulted in a considerable reduction in operating costs in the Sampang PSC [production sharing contract.”

Cue (ASX:CUE) says it’s doing more exploration around the Indonesian fields with the Paus-Biru-1 exploration well approved for October.

Cue Energy shares over the past year (ASX:CUE)
Cue Energy shares over the past year (ASX:CUE)

The exploration jewel however is in the north-west shelf near Woodside Energy’s offshore North Rankin LNG infrastructure.

Cue has a deal to sell Beach Energy 21 per cent of a permit called WA-359-P which includes a field known as the Ironbark gas prospect.

The agreement is dependent on BP exercising its option to take 42.5 per cent of the permit. It is doing due diligence on the area and the option expires in October.

Cue says if the deal goes ahead it could be “company changing”.

Cue’s revenue dropped 30 per cent to $24.5 million in the 2018 fiscal year, but production costs also dropped by over $5 million and a $6.4 million write down in 2017 was off the books this year.

The company has no debt and $17 million in cash.

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