New Zealand Oil & Gas, which is on the prowl for new investment opportunities, has sold its 27.5 per cent stake in the Tui oil fields off the coast of Taranaki for US$750,000.
The Wellington-based company has been considering the exit since mid-December when Tamarind, an energy company backed by Blackstone Energy Partners, bought a 57.5 per cent interest from the field's operator, AWE. Tamarind will take on the field's assets and liabilities, including US$4.7 million in oil, $6 million of working capital, and all field retirement obligations.
"The sale of the Tui interest allows New Zealand Oil & Gas to realise the present value of the remaining Tui reserves while reducing exposure associated with the uncertain end of field cessation costs," chief executive Andrew Jefferies said in a statement. "New Zealand Oil & Gas analysed the Tamarind offer and finds it compelling based on Tamarind's specialist end-of-field-life capability, including optimising late stage production and abandonment operations."
NZOG is sitting on a war chest after selling its 15 per cent stake in the Kupe oil and gas fields to Genesis Energy for $168m. While $100m will be returned to shareholders, the rest is being held back while the energy explorer and producer seeks out bargain acquisitions when a protracted period of low oil prices has prompted bankers to give up on loss-producing fields.
Jefferies today reiterated the company's plans to find new opportunities, saying they had "a preference for gas in markets we understand".
Last month, NZOG took control in ASX-listed Cue Energy, lifting its stake to 50.01 per cent from the 48.1 per cent level it achieved in a hostile takeover bid in 2015. Cue has interests in New Zealand, Indonesia and Australia.
NZOG shares rose 1.6 per cent to 64 cents and have jumped 59 per cent over the past 12 months.