Creditors of Tamarind Taranaki, the oil company which collapsed into liquidation in December, face almost total loss even if a major secured claim is declared invalid.
A first liquidators' report also reveals that a Hong Kong-based lender has an agreement with Tamarind's Malaysian-owned parent which grants it security over assets including assets previously owned by Canadian company TAG, which include onshore Taranaki oil wells.
An unsuccessful campaign to extend the life of the wells in the Tui permit, 50km off the Taranaki coast, saw Tamarind face a cash crisis which eventually led to it being placed in receivership and liquidation on December 19.
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This week liquidators Borrelli Walsh released their first report into Tamarind's troubles, which warned that even in a best case scenario for unsecured creditors, they would recover a few cents in the dollar.
At the end of 2019, Tamarind had only around US$1 million ($1.5m) cash in the bank with around another US$2m cash estimated to be recovered from its final oil sales and US$874,000 from sales of equipment, the report said.
Borrelli Walsh also estimated that up to US$12.1m could be recovered from tax rebates related to abandonment costs incurred, although they acknowledged that a refund from Inland Revenue under a new tax regime was uncertain.
Even if the tax refund was recovered, the total amount which could be realised would be US$16m, a tiny fraction of the claims submitted by creditors.
The report reveals more than 80 creditors have submitted claims to liquidators totalling almost US$320m, with unsecured creditors representing more than US$251m.
Around US$100m of this is understood to be a claim lodged by the Ministry of Business, Innovation and Employment related to the cost of cleaning up the Tui wells once production ends.
Borrelli Walsh said if the claim of the secured creditor, Hong Kong-based OCP, was found to be valid, unsecured creditors had no prospect of any recovery.
In the event that OCP's secured claim was declared invalid, unsecured creditors face a best-case scenario of recovering 4.1c in the dollar, but could get as little as 0.7c in the dollar.
While the liquidators say claims continue to be submitted - only 82 of more than 120 creditors that have been identified have submitted claims - the report said some of the claims may ultimately be rejected.
The validity of OCP's claim is being examined.
OCP had submitted a claim of US$65m, however the figure relates to a total "funding exercise" with the wider Tamarind group in July 2019.
However only a small part of the transaction between OCP and Tamarind (US$7.1m) was for the offshore drilling campaign of Tamarind Taranaki.
Most of the funds were to fund purchase of TAG Oil's New Zealand assets (US$28m) by a different Tamarind entity and to buy out an equity option Singaporean commodities giant Trafigura held over the Malaysian company (US$26m).
As part of the agreement, Tamarind granted OCP security over a wide range of its assets, including assets previously owned by TAG.
Borrelli Walsh said it was likely a court would decide what value should be ascribed to OCP's claim.
The liquidators said they would investigate whether there were voidable transactions or breaches of directors' duties, but warned that as PwC had now been appointed receivers, Borrelli Walsh did not have control of Tamarind Taranaki's assets so had no funds to pursue any claims.
Even Borrelli Walsh's role in Tamarind is in dispute.
In November COSL, the Chinese company which provided the vessel which drilled the Tui wells, filed court action opposing Borrelli Walsh's possible appointment as liquidators because of the firm's previous involvement with OCP in earlier corporate restructures. The application was adjourned to February 3.
Borrelli Walsh acknowledged the earlier involvement but denied it gave rise to a conflict of interest.