Oil and gas producer Drillsearch Energy is cutting exploration and costs after weaker oil prices slashed half year profit by 60 per cent.
The central Australian operator's net profit slumped to $14.3 million in the six months to December 31, from $35.5 million in the same period a year earlier.
Lower revenues and $62 million in writedowns related to plunging oil prices dragged on the company's bottom line.
A review of its operations has resulted in a target of annual savings of between $10 million and $15 million, plus a shift in its investment focus to near-term production, rather than exploration for new reserves.
"We all know about the dramatic movement in the oil price environment and we are acting thoughtfully and decisively in response to adapt to rapidly changing conditions," chief executive Brad Lingo said.
"While this has been a difficult period for the sector, Drillsearch continues to benefit from low cost, high margin assets, and a healthy financial position that will ensure the company is well placed to benefit once global commodity markets improve."
Drillsearch shares lost six cents, or 5.8 per cent, to 97 cents.
The company realised an average oil price of $A105.40 per barrel during the period, well above the sub-$US60 spot prices experienced for much of calendar 2015 so far.
Meanwhile, the company has a new, high profile backer, with Kerry Stokes-controlled Network Investment Holdings taking a 3.8 per cent stake, worth about $17 million.
DRILLSEARCH HIT BY WEAK OIL PRICE
* Net profit of $14.3m, down 60 pct from $35.5m in 2013/14
* Revenue of $146.7m, down 27 pct from $200.4m
* No interim dividend, unchanged
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