NZ Oil & Gas builds 'War-Chest' from Tui flows, options

Tuesday 1st July 2008

New Zealand Oil & Gas is building a war-chest for acquisitions as shareholders take up options and the company benefits from oil flowing from the Tui field.

The company raised about NZ$180 million from the sale of the options, which expired yesterday, with about 84% take-up and more in the mail, said spokesman Chris Roberts. NZOG also has been reaping its 12.5% share of Tui's production, which was 14.2 million barrels in the year ended yesterday, sold at an average US$100 a barrel.

"We do have a considerable war-chest to pursue new investments," Roberts said. "We've been looking very hard for opportunities in the last six or nine months."

The company had assessed specific opportunities in the past 12 months, taking some of them to an advanced stage, without clinching a deal. "There's certainly opportunities out there," Roberts said.

NZOG's market value has grown to about NZ$700 million from about NZ$265 million in January. Shares on issue have increased to 374 million from 262 million then. The stock rose 4.5% to NZ$1.86 today and has climbed about 55% this year.

The Tui oilfield's output helped lift New Zealand's merchandise exports 11% to a record for the month of May. The value of crude oil exports in May 2008 was $241 million, up $142 million from May 2007, according to a Statistics New Zealand report this month.

AWE is the operator of the field and largest participant, with 42.5%. Mitsui E & P Australia Pty has 35% and Pan Pacific Petroleum NL has 10%.

By Jonathan Underhill

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