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


Geoff Loudon swoops on NZ Energy Corp in gas deal

Geoff Loudon swoops on NZ Energy Corp in gas deal

By Pattrick Smellie

Aug 1 (BusinessDesk) - Serial oil and minerals investor Geoff Loudon's L&M Energy has done a deal to help get Toronto-based New Zealand Energy Corp out of a financial hole while securing a half-share of the long-producing gas fields known as TWN, and the associated Waihapa production station.

NZEC has been looking for months for a solution to its problem, which arose when the company ripped through working capital due to a string of missed production targets, leaving it around C$17 million short when trying to complete its deal with Origin Energy to buy the TWN assets.

The solution that has emerged is an $18.25 million investment by L&M Energy to create a 50/50 joint venture to "explore, develop and operate the Tariki, Waihapa and Ngaere licences, the Waihapa production station and associated pipelines and infrastructure," NZEC said in a statement to the Toronto Stock Exchange.

NZEC will be the operator for the TWN joint venture licences and "decisions regarding exploration, development and operations of the Waihapa assets will be made by management committees with equal representation from both companies," NZEC chief executive John Proust said.

However, NZEC still needs a further $12 million to complete the Origin deal and add to existing working capital and is "continuing to pursue a number of strategic options," Proust's statement said.

NZEC originally agreed in June 2012 to pay Origin C$42.5 million for the Taharoa, Ahuroa, Waihapa and Ngaere oil and gas field licences and production facilities, onshore Taranaki.

However, a restructured deal, announced in June this year, saw the price drop $C9 million, removed the Ahuroa licence area, and saw NZEC become operator of Contact Energy's Ahuroa gas storage facility.

"I've been watching this transaction unfold with interest," said Loudon, who owns L&M Energy. "I have long believed the TWN licences and infrastructure hold great potential, both from an exploration perspective and with the strategic marketing and business opportunities presented by the Waihapa production station."

NZEC listed on the Toronto Stock Exchange in August 2011, raising just over C$21.9 million in its initial public offering. The company raised almost C$63.5 million in March 2012, though its market capitalisation has tumbled over the past 12 months, with its shares falling from a peak of C$3.19 to as low as 33 Canadian cents, wiping about C$350 million off the value of the company. Its shares fell in trading since the announcement, down 1.5 percent yesterday to C32 cents.


© Scoop Media

Business Headlines | Sci-Tech Headlines


MPI: Dry Autumn In Waikato And South Auckland Leads To Drought Classification Drought conditions affecting the primary sector in the Waikato and South Auckland were today classified as a medium-scale adverse event, enabling a package of support for farmers and growers... More>>

Commerce Commission: Invites Feedback On Its Initial Views Of Wellington Airport’s Pricing Decisions

The Commerce Commission is inviting feedback on its initial views, released today, about Wellington Airport’s pricing decisions for specified airport services, such as aircraft parking or airfield and passenger terminal charges, for the period 1 April 2019 to 31 March 2024... More>>

Government: Lower Card Fees On Way For Business, Consumers

A Bill to help lower the fees charged when credit and debit transactions are made, will save New Zealand businesses around $74 million a year... More>>

Barfoot & Thompson: Rents Up By Around 3% In Most Areas

The average weekly rent paid for homes in most areas of Auckland has risen by around 3 percent year-on-year. The figures for end March from more than 16,000 properties... More>>

DoC: Smeagol The ‘Gravel Maggot’ Leaves Its Rare Mark On The Remote West Coast
An extremely rare species of sea slug or ‘gravel maggot’ has been detected for the first time on a remote beach in South Westland... More>>

Immigration: Annual Net Migration Loss Of 7,300

The provisional net loss of 7,300 people in the year ended March 2022 was the lowest net migration for a March year since 2012, Stats NZ said today... More>>