New Zealand Oil & Gas (NZOG) is looking to increase its portfolio through the acquisition of producing assets, developing projects, and exploration prospects.
NZOG said in its strategic review on Thursday that the future direction of the company would be to assess and acquire high-quality assets.
According to the company, it has access to a significant cash balance, and that accessing additional capital is a challenge in today’s market. So the company claimed it would be working on “ identifying compelling investment opportunities “.
NZOG added that acquisitions of a transformative scale cannot be its sole focus because “ [the company] cannot tell what the future might bring ”.
Instead, it will be on pursuing investment opportunities of a size and scale that the company’s current balance sheet can support, without having to raise significant additional capital.
NZOG disclosed that it recently signed several confidentiality agreements and is actively evaluating opportunities that fit within the aforementioned parameters. NZOG’s focus remains on oil and gas assets in geographies where the firm has “ a clear advantage ”, primarily Australia and New Zealand.
A noteworthy thing said in the new strategic review was that management already conducted an extensive review of assets in the Australia-New Zealand region that were the size of what the company can afford.
“ While it is too soon to tell if this will lead to attractive investment opportunities, we are optimistic that assets at value will emerge in this time of intense dislocation for our industry ”, the company said.
In the meantime, NZOG is preparing for the drilling of Ironbark which is still on schedule for the end of this year despite the COVID crisis and is moving forward Kupe compression as well.
With a portfolio weighted heavily towards gas and a strong balance sheet, NZOG was also able to weather the COVID-19 storm and oil price drop with its stock price rising by 13 per cent over the past 12 months.
Furthermore, the company said that it was counting on the distress in the energy markets to provide it with even more growth opportunities.