NEW ZEALAND Oil & Gas (NZOG) has recorded a fourth quarter revenue of NZ$30.8 million, NZ$2.5 million lower than in the September quarter after a planned 28 day shutdown at the Kupe production station.

Operated and 50 per cent owned by Origin Energy, the reserves of the Kupe oil and gas field on PML 38146 were upgraded 34.7% by NZOG in the September quarter to 5.6 million barrels from the previous 4.2 million.

Project partner Genesis Energy upgraded its 31% per cent stake in the field by 33% in the December quarter, a move which NZOG said was broadly aligned to its own approach, with the variation reliant on a predicted end of field life.

“This reserves increase not only provides additional volume from within the existing development but it’s expected that contracted volumes will be able to be supplied without the need for significant additional capital,” NZOG said in its December quarter announcement.

“A recommendation on the second phase of development at Kupe is expected from the operator next quarter.”

Revenue from the field was NZ$9.5 million during the quarter, down from NZ$14.4 million recorded in the September quarter and down from the NZ$15.6 million recorded in the December quarter of 2014.

Revenue from NZOG’s 27.5% stake in the AWE-operated Tui field was NZ$6 million, down from NZ$11.7 million the year before, while revenues from NZOG’s 48.11% stake in production and financials was NZ$15.3 million in the December quarter.

In its quarterly announcement, NZOG said it had reduced its exploration activity in response to the changing economics of the projects, deferring what it said was even its most promising prospects.

“By the end of 2015 the environment for sharing risk by farming out our interests in our portfolio had become very quiet,” the company said.

Instead, the company was focusing on producing assets as an opportunity for growth, saying that it was actively screening opportunities as asset owners moved to restructure their portfolios.

“Several opportunities which may be sufficiently rewarding were under consideration at the time this report was produced,” NZOG said.

“Meanwhile, our gas and [liquefied petroleum gas] prices have not been impacted as much as oil. Cashflows from these segments will continue to support our business.”