NZ Resources Exploration: NZOG Evaluating Projects Fit For Its War-Chest
November 4th, 2009
NZ Oil & Gas is evaluating a number of new potential ventures, having found little evidence of “fire sale” opportunities during the global credit crunch, perhaps because the recovery has appeared more swiftly than earlier anticipated. CEO David Salisbury says NZOG has strict criteria for new projects, and is “focused on creating one or two new core areas, as opposed to a wide geographic spread of interests” with an emphasis on “near term payback as opposed to long term horizons.” The company is not interested in stranded gas assets, and is looking for “oil, condensate and gas in proven basins, with existing open access infrastructure, ready access to product markets at transparent prices, with scope to grow, healthy financial returns, manageable risks, and fiscal and political stability.”
NZOG will be an active rather than a passive joint venture partner. While the company would have liked to have seen returns before now from its 30% shareholding in Pike River Coal, a ventilation shaft collapse and subsequent production problems had delayed its development, with first coal shipments now scheduled for the first quarter of 2010. McDouall Stuart research analyst John Kidd believes this is more likely to be early in the quarter, having made a recent site visit.
While NZOG announced further increases in its share of costs for the Kupe development, up by $10m to $20m to around $200m in total, the size of the resource is also larger than previously thought, and with commissioning now proceeding, 15 years and “many billions of dollars” of steady income is expected from the field.
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