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NZOG considers Tui exit after offer

NZ Newswire logoNZ Newswire 14/12/2016 Jonathan Underhill

<span style="font-size:13px;">New Zealand Oil &amp; Gas is considering an offer from energy company Tamarind to buy its 27.5 per cent stake in the Tui oil field.</span> © Getty New Zealand Oil & Gas is considering an offer from energy company Tamarind to buy its 27.5 per cent stake in the Tui oil field. New Zealand Oil & Gas says it's considering an offer to buy its 27.5 per cent interest in the Tui oil field after Tamarind, an energy company backed by Blackstone Energy Partners, agreed to buy the 57.5 per cent stake held by field operator AWE for $US1.5 million ($NZ2.1m).

The agreement between ASX-listed AWE and Tamarind was announced on Tuesday, with AWE saying the bidder had the ability to "maximise value from late life assets" and experience in decommissioning offshore oil projects.

With Tamarind on board and oil prices rising, Tui could potentially operate beyond 2019, AWE said.

NZOG said the Tui joint venture partners, which include Pan Pacific Petroleum with 15 per cent, have certain rights when the operatorship is transferred and must give consent to the deal.

"We are currently reviewing the announced transaction and considering the offer we have received to determine whether our interests are best served by accepting the offer or continuing to participate in the asset through its decommissioning phase," said NZOG chief executive Andrew Jefferies.

NZOG said the value of Tamarind's offer would be disclosed if it was accepted.

Based on the offer to AWE, NZOG's stake could be worth $US715,000 ($NZ992,634) although Tamarind is agreeing to buy AWE New Zealand, AWE Taranaki, assets, inventory, AWE's oil hedge book and a working capital cash balance of $US10.8m ($NZ15.0m).

Earlier this month, NZOG recommended shareholders support the proposed sale of the energy explorer and producer's stake in the Kupe oil and gas field to Genesis Energy for $168m after an independent appraisal report deemed the offer was fair.

Shareholders meet to vote on the Kupe transaction on Dec. 16.

At the company's annual meeting in October, chairman Rodger Finlay told shareholders the company had "pulled back on exploration because, in the current environment, oil prices are considerably lower than they were two or three years ago."

NZOG shares last traded at 60.5 cents and have jumped 42 per cent this year.

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