Revenue rose 15.7% to $57.1 million for the period, due largely to an increase in the average price per barrel of oil from $54.62 to $74.42, the doubling of gas production to 3395 terajoules and a more favourable exchange rate, the company said.

Oil production dipped marginally during the half year to 597,355 barrels net to Arc due to operational problems at the Jingemia field in Western Australia in the September 2005 quarter and declining production at the Hovea field in WA, in line with reservoir modelling predictions.

However, overall production, including gas, climbed 18.5% for the six months ended 31 December, 2005 to 6161 barrels of oil equivalent per day (boepd), compared with 5199 boepd in the previous corresponding period.

Production is expected to remain steady for the second half of the 2006 financial year, but increased output at the Origin-operated Jingemia oil field and the expected start-up of the offshore Cliff Head oil field both offer upside.

Net profit after tax for the half year rose 20.2% to $19.4 million, despite a $3.7 million non-cash exploration expense charge.

“This strength provides the leverage for us to continue to explore new business development opportunities to expand and grow the company,” managing director Eric Streitberg said.

“Unlike the current situation of many companies in the oil and gas sector, Arc’s projects are fully developed and have steady and assured cash flow,” Streitberg said.

“Together with our very strong cash position, this enables us to easily fund our existing operations, as well as being able to move swiftly to exploit other opportunities as they become available without funding or lender constraints.”

The next phase of Arc’s onshore drilling program in the Perth Basin is expected to start in July following mobilisation of a larger drilling rig, finalisation of required approvals and thorough analysis of the very large amount of data generated by the drilling program to date.

A high-impact offshore exploration program of at least five wells is also scheduled to start in May, Streitberg said.

“Prospectivity for both the onshore and offshore Perth Basin remains high and we want to be in the best position to take full advantage of that,” he said.