Contact's share price has dropped about 15% in recent days, primarily as a result of continued speculation about the intentions of the cash-strapped EME. Contact yesterday told the NZX it did not possess any information which might reasonably explain the share price variations.

"We are aware that there has been recent speculation in the market regarding the intentions of Contact's majority shareholder, Edison Mission Energy. However, Contact does not have specific knowledge regarding EME's intentions," said company general counsel Ross O'Neill.

Rumours recently re-emerged about EME's cornerstone shareholding in Contact after Edison Mission chief executive Tom McDaniel resigned from the Contact board, saying he needed to devote significant time to implementing the EME restructuring plan.

Meanwhile, Contact has also announced that its contracted gas entitlements from the Swift Energy-operated Tariki, Ahuroa, Waihapa and Ngaere fields may have to be reduced.

Last October Swift told Contact that it might not be able to supply an extra 28 Petajoules of gas it previously thought recoverable from existing wells and production facilities.

Contact yesterday said its own expert advice also confirmed the likelihood of "a contractual reduction".

Contact and Swift were discussing whether additional investment might result in extra recoverable reserves to make up the shortfall - of approximately 10 PJ per annum until the end of 2007.

The gas at risk represents a very small percentage of Contact's total gas entitlements and most Tawn gas goes to the nearby Contact-owned Taranaki Combined Cycle power station at Stratford.