Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

NZ Oil & Gas buys back into Kupe at lower price

Thursday 18 May 2017 09:31 AM

NZ Oil & Gas buys back into Kupe at lower price after Genesis paid premium to augment LPG strategy

By Jonathan Underhill

May 18 (BusinessDesk) - New Zealand Oil & Gas has bought back into the Kupe oil and gas field at a lower price than it sold to Genesis Energy just months ago when it took advantage of Genesis's appetite for natural gas assets to augment its LPG strategy.

NZOG has agreed to buy Mitsui E&P Australia's 4 percent interest in Kupe for $35 million in a transaction with an effective date of Jan. 1, meaning it comes less than two months after it agreed to sell its original 15 percent holding in the field to Genesis for $168 million, effective at that same date. The transaction prices indicate Genesis valued Kupe at about $1.1 billion while NZOG's deal with Mitsui puts an $875 million value on the field.

Genesis was willing to pay a premium because the 15 percent interest added to its existing 31 percent stake in the field, giving it greater influence over the joint venture and helping meet its integrated fuels strategy. It also provided an immediate boost to earnings. The country's biggest electricity retailer followed up this month by agreeing to buy the retail LPG business of Todd Corp's Nova Energy unit for $192 million, a deal that will lift its share of retail LPG in New Zealand to 19 percent from 3 percent and make it the second-largest player in that market by customers behind Contact Energy.

For its part, NZOG would get ongoing income from what it saw as a high-quality field and the funds freed up from the earlier sale could be used to buy other assets.

“The combined transactions allow us to better diversify our portfolio,” NZOG chief executive Andrew Jefferies said in a statement.

The transaction, which adds 2.6 million barrels of oil equivalent to NZOG's reserves as at Jan. 1, requires regulatory approvals and agreement from the other joint venture partners, who have first right of refusal.

Kupe is operated by Origin Energy, which has a 50 percent interest. First discovered in 1986, Kupe entered production in 2009.

NZOG shares last traded at 63 cents and have gained 31 percent in the past 12 months. Last month the company gained High Court approval for a $100 million return of capital to shareholders via a scheme of arrangement.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Manawatu-Whanganui Projects: PGF Top-Up To Rural Broadband Roll-Out

The government has effectively raided the $3 billion Provincial Growth Fund to top up the budget for the second phase of its rural broadband initiative, filling in mobile 'black spots' and ensuring broadband is available to marae that don't have access now. More>>

ALSO:

Other Windy Cities: Auckland-Chicago Named A Top 10 ‘Most Exciting’ New Route

The inclusion of Auckland-Chicago on Lonely Planet’s Where to fly in 2019? The 10 most exciting new flight routes list comes just two weeks before Air New Zealand prepares to celebrate its inaugural flight to Chicago’s O’Hare International Airport on 30 November. More>>

Deadly Strain: ESR Ups Its Reporting On Meningococcal Disease

The increasing number of cases of Group W Meningococcal disease (MenW) has prompted ESR to increase its reporting on the disease to the Ministry of Health. ESR has upped its reporting to weekly. More>>

ALSO:

Very Small Things: "Game-Changing" 3D Printing Technology Launched

New Zealand microfabrication researchers Andrea Bubendorfer and Andrew Best, the co-inventors of a new way of fabricating very small things with Laminated Resin Printing (LRP), are part of Callaghan Innovation’s MicroMaker3D team launching the new patent pending technology in the US this week. More>>

ALSO: