Varanus gas buy boosts Quadrant profit
Summary: Quadrant Energy’s acquisition of a bigger chunk of the Varanus Island gas hub has boosted the oil and gas producer’s profit through the asset’s revaluation.....
The private WA company — which has been exploring changes to its ownership structure — reported to the corporate regulator a $US342 million net profit for calendar 2017.
The spike from the previous year’s $US86 million was attributable to a $US192 million gain related to it buying partner KUFPEC’s 19 per cent interest in Varanus’ Harriet joint venture.
The financial report said Quadrant was required to remeasure its previously held interest in the operation to its acquisition date fair value.
“The increase in value in the previously held interest relates primarily to tolling agreements that have been negotiated for access to the infrastructure owned by the Harriet joint venture on Varanus Island,” the report said.
The 2016 profit had also been dragged down by a $US95 million impairment of oil and gas properties and greater exploration costs. Quadrant’s revenue last year increased to $US823 million from $782 million.
No dividends were paid to shareholders, the biggest being Macquarie Capital and Brookfield Asset Management.
A proposed sharemarket float of Quadrant, which acquired the WA assets of Apache in 2015, was reportedly called off last month.
The sale of a stake in the company is considered a live option.
The company recorded its total equity at $US604 million, a more than 100 per cent increase from the previous year’s $US302 million, largely because of a reduction in liabilities.
Its consolidated gross assets were valued at $US4.14 billion.
Chairwoman Katherine Vidgen said in the directors’ report the company remained committed to exploring for hydrocarbons and was confident in the industry’s fundamentals.
“Quadrant Energy is in a strong position as it enters 2018 as it holds a strong production base and has identified a number of potential growth opportunities,” Ms Vidgen said.
The company has a $US200 million claim against Apache from their 2015 deal and they are in dispute over an $83 million tax refund.
Quadrant at December 31 also had $US2.51 billion of unrecognised deferred tax assets relating to the petroleum resource rent tax.