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Contact – Origin merger welcomed

21 February, 2006

Contact – Origin merger welcomed

Prominent New Zealand oil and gas lawyer, Bryan Gundersen from Kensington Swan has welcomed the merger of Contact Energy Ltd and Australian Origin Energy as good for the New Zealand exploration scene.

The merger was announced earlier this week. The new company, to be called ContactOrigin, will have a market capitalisation of more than $7 billion and a yearly operating profit of more than $1 billion.

The Chairman of the Contact’s Independent Directors Committee Phil Pryke said yesterday the merger strengthens the capacity to find and secure additional gas resources by giving direct access to Origin’s exploration and production expertise.

Bryan Gundersen said although it is not necessarily the size or clout of a company that dictates success in the exploration and securing of gas supply, the ability to have a diverse portfolio is critical.

“Contact’s requirements in relation to security of gas supply will create an added incentive on Origin to be successful in its New Zealand exploration activities.

“The recent lack of interest in the New Zealand blocks offer along with the identified barriers to investment make mergers such as between Contact and Origin critical to further exploration in New Zealand.”

Mr Gundersen said an interesting aspect of the new structure will be how Contact will manage the New Zealand LNG feasibility studies now the project could directly compete with Origin’s exploration activities.

Bryan Gunderson is a specialist in energy and resource legislation at Kensington Swan.

ENDS

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