The company's average refining margin fell to $5.04 a barrel for the two months, from $10.76 a year earlier and $7.72 a barrel in January and February, New Zealand Refining said in a statement to the New Zealand stock exchange.
The Ruakaka-based company is controlled by the local units of Chevron Corp., Royal Dutch Shell Plc, Exxon Mobil Corp. and BP Plc. It charges customers a fee based on Singapore refining margins to process their oil at the Marsden Point refinery in the north of the country's North Island.
Margins fell after the refinery's hydrocracker was shut for 24 days and a crude distillation units was offline for 14 days, the company said. Throughput fell to 5.75 million barrels in the period, from 6.5 million barrels a year earlier, according to the refinery's Web site.
AUSTRALIA: Santos Plans A$300 Million Buyback to Lift Returns
Santos Ltd., Australia's third-biggest oil and natural gas producer, plans to buy back 4.8 percent of its shares for about A$300 million ($250 million) to increase investor returns.
The buyback, to be funded by working capital and debt, has been prompted by the company's ``solid'' balance sheet and cash flow, combined with the board's view that the shares are undervalued, Chief Executive Officer John Ellice-Flint said in a statement to the Australian Stock Exchange. Shares in the Adelaide-based company had their biggest jump in 19 months.
Santos, whose stock has lagged behind the Australian Stock Exchange's index of energy companies the past five years, may have less capacity to carry out a major development or acquisition because of the buyback, Standard & Poor's Ratings Services said.
``It makes sense to return some of that cash to shareholders,'' said Gavin Wendt, senior resources analyst at Fat Prophets Funds Management in Sydney. ``It is an expensive time to be buying assets and perhaps they haven't seen anything that's worthy of consideration. This will have the effect of pushing the share price up; the market will like it that's for sure.''
Shares in Santos leapt as much as 95 cents, or 7.8 percent, to A$13.20, the first time they have traded above A$13 since February 2006. The stock was at A$13.04 at 12:56 p.m. in Sydney.
Investments Continuing
``The buyback is expected to improve the efficiency of Santos's capital structure and result in improvements to earnings per share and return on equity,'' Ellice-Flint said in the statement. ``We will continue to make significant investments in our growth businesses.''
Santos may get its ownership restrictions lifted as the South Australian state government said May 1 it will review the 15 percent cap on individual shareholdings after a request from the company.
The company said Feb. 22 it expects to make A$1.18 billion of capital investments this year, down 9.6 percent from 2006. Investments include A$173 million in exploration, as well as A$591 million in development in projects such as the Cooper Basin oil venture, the Fairview coal seam gas project and the Oyong and Maleo fields in Indonesia.
The buyback will be carried out through a tender process. Shareholders will be invited to offer their shares at a discount of between 8 percent and 14 percent of the market price. Santos will determine the final buyback price based on the largest discount in that range that enables it to repurchase the required amount, the company said.
Tender Price
Shares may be tendered starting June 12 until June 29 and the price will be determined June 30, Santos said in a presentation lodged with the exchange.
Santos's BBB+ credit rating isn't affected by the buyback, Standard & Poor's said. The company also said it intends to underwrite its dividend reinvestment plan for the 2007 half-year and final dividends.
``Supported by the strong cash flows generated from periods of high crude oil prices in the past two years, the ratings on Santos can accommodate the A$300 million share buyback proposed,'' credit analyst May Zhong said in the statement. ``Nevertheless the proposed capital return may reduce the company's balance sheet capacity to undertake a major development or acquisition.''
