Oil and gas explorer and producer Drillsearch Energy has warned that its half-year financial results are likely to include up to $64 million in impairments because of falling oil prices.
Drillsearch said on Thursday that the impairments related mainly to the company's Eastern Margin/Tintaburra oil assets in Queensland, and the write-off of some exploration permits.
"The anticipated impairments flow from the company's bi-annual assessment of carrying values undertaken in the context of the rapid decline of the oil price during the six months ended 31 December, 2014 and the subsequent lowering of forward curve oil price expectations," Drillsearch said in a statement.
Drillsearch said it did not expect the potential impairments to materially affect its oil reserves, production, cashflow and Petroleum Resource Rent Tax (PRRT) credits at this stage.
Drillsearch expects its tax rate for the half year to be about 25 per cent, down from 60.1 per cent in fiscal 2014, mainly as a result of using PRRT credits.
The company expects to report positive earnings per share for the half year.
Drillsearch is scheduled to release its half year results on February 19.
Its shares were steady at 93 cents on Thursday.
In January Drillsearch said it was on track to meet its full year production target, but a steep drop in oil prices has caused a fall in revenue.
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