NZ Oil & Gas shares slump by a third on Pike explosion as trading halt lifts

Tuesday 23rd November 2010

New Zealand Oil & Gas shed as much as a third of its market value when the shares resumed trading after being halted for the Pike River Coal mine explosion.

NZOG shares slumped 36 cents to 84 cents and earlier sank to 80 cents, the lowest since April 2005. The oil and gas company owns 29% of Pike's shares, which remain on trading halt, 17 million options, $29 million of convertible bonds and a short-term funding facility with $13.1 million outstanding. It also has an option until March 2013 to purchase Pike coal at market prices.

"NZOG is continuing to honour the short term funding facility and arrangements are being implemented for PRC to draw down the balance of the facility, being $12 million, on the understanding that all secured creditors will approve a stand-still period of 90 days," chairman Tony Radford said in a statement.

NZOG's statement said while the investment in Pike was 'significant' the majority of its assets were in oil and gas holdings and cash.

There's still no word on the 29 miners trapped in the South Island mine since a gas explosion on Friday. Pike is close to completing an inspection bore hole though a New Zealand Army bomb disposal robot conked out just 500 metres into the mine earlier today. Efforts are being made to secure a more high-tech robot.PRC chief executive Peter Whittall told reporters at a briefing today that the 29 miners were likely in two main groups within the mine, having been conducting various tasks during a break in actual mining on Friday. Dangerous levels of explosive gas are preventing any rescue teams entering the mine.

BusinessDesk.co.nz

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