New Zealand Oil & Gas shares rose to a six-week high after the company announced plans to buy back 2.5 percent of its stock over the next 12 months because the market was under-valuing their worth.
NZ Oil & Gas will buy back as many as 10 million shares between Nov. 7 and Oct. 31 next year, it said in a statement.
The shares rose 2.9 percent to 72 cent and have climbed 16 percent since Oct. 26, when chairman Tony Radford told shareholders at the company’s annual meeting that the price was “ridiculously low”.
They sank as low as 58 cents in August, when it reported a $75.9 million loss, reflecting a charge for its stake in the failed Pike River Coal venture.
“The NZOG board is of the view that the current share price is significantly below fair value and does not reflect a reasonable current valuation of the company or its prospects for further growth,” the company said today. NZOG “will continue to maintain a strong balance sheet to fund capital expenditure for on-going growth initiatives.”
Shares bought back will be cancelled, the company said.