Swift eyes sale of NZ Oil

By NZPA

Tuesday 15th May 2007

Swift Energy Company, an American company controlling about 16% of New Zealand's oil and gas reserves, says it may sell them.

Houston-based Swift Energy has oil and natural gas reserves equivalent to 106 billion cubic feet (3 billion cubic metres) of gas in New Zealand.

The company -- which operates through Swift Energy New Zealand (SENZ) -- said in a statement it saw value in its New Zealand assets "that is not being realised in our current stock valuation".

Chief executive officer Terry Swift said that other alternatives to selling the New Zealand business, which comprised two onshore production areas in Taranaki and oil and natural-gas processing plants and pipelines, included entering into joint ventures and "reshaping of long-term operational strategy".

Its NZ production fell 16% in 2006 and 40% in the first quarter of this year.

"Many investors and analysts feel the New Zealand effort is an unneeded distraction for the management team," John White, an analyst at Natexis Bleichroeder in Houston told the Bloomberg newsagency.

Swift Energy's production in the US rose 18% last year, with about 64% of its proved reserves in Louisiana and another 22% in Texas. Swift Energy said it was in discussions with several unidentified companies to advise it on disposal of the NZ assets.

Shares of Swift Energy rose US62c (NZ85.1c), or 1.5%, to $US40.90 ($NZ56.14) in New York Stock Exchange composite trading. The stock has fallen 8.7% this year.

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