New Zealand Oil & Gas (NZOG) has received government approval for the acquisition of Mitsui’s four percent interest in the Kupe gas and light oil field off New Zealand.
NZOG said on Tuesday that it received approval from the Overseas Investment Office and New Zealand Petroleum & Minerals and that conditions required for completion of the transaction had been satisfied.
The buy of the stake for NZ$35 million ($24.3 M) was announced in May and has an effective economic date of January 1, 2017. According to the company, the transaction is expected to complete within the next ten days.
This acquisition is expected to add 2.6 million barrels of oil equivalent, made up of 11.27PJ of gas, 0.37mmboe of condensate, and 47,564 tonnes of LPG, to NZOG’s reserves.
Kupe is offshore from South Taranaki. It comprises an offshore remote-operated production platform, a pipeline and umbilical cable to shore, and an onshore production facility near Hawera. New Zealand Oil & Gas previously held 15 percent interest in the field but sold it to Genesis Energy on January 1, 2017.
Providing clarification on why the company bought a four percent stake after selling a 15 percent stake on the same effective date, NZOG said: “The sale of 15% and acquisition of 4% of Kupe has allowed us to maintain exposure to a quality asset while we are moving to diversify our portfolio.
“Previously, the company’s entire market capitalization was reflected in the Kupe asset. Reducing this exposure to a single asset and returning $100 million of capital to shareholders allows the company to diversify our risks and creates opportunities to pursue growth for shareholders alongside Kupe’s ongoing returns.”
Kupe is operated by Lattice Energy Resources (Kupe) Limited, which together with its related companies has a 50 percent interest. Genesis Energy, through its subsidiaries, holds 46 percent.
In other news, Singapore’s O.G. Oil & Gas made a partial takeover offer for NZOG. If the offer is successful, OGOG will hold more than 62% of New Zealand Oil & Gas’s fully paid ordinary shares currently on issue.