Wellington-headquartered Infratil told the NZX yesterday afternoon that it had acquired 2.456 million Austral Pacific Energy (APX) shares at a placement price of US$2.50 per share for a total investment of US$6.14 million.
Infratil would also receive 1.228 million unlisted APX warrants, which would entitle it to acquire further Austral stock at US$3.50 per share anytime within the next year.
HRL Morrison and Company executive director Bruce Harker told EnergyReview.net this morning that Infratil's first move upstream complemented its existing energy interests - stakes in Tauranga-headquartered electricity player TrustPower, and Melbourne-based Victoria Electricity and Energy Developments Ltd.
"We expect our total upstream exposure to remain modest in relation to Infratil's total investment in the energy sector," Harker said.
“Austral Pacific provides some upstream exposure for Infratil to New Zealand's tight gas supply market. It has a number of prospective exploration opportunities, predominantly in Taranaki, and is well placed to grow its portfolio.”
When asked if Infratil had also looked at fellow NZX-listed New Zealand Oil & Gas, Harker told ERN that Infratil had previously investigated investing in Austral when it was Indo-Pacific Energy and was thus more familiar with the company.
“We have not specifically looked at NZOG, nor excluded it,” he said.
Harker said Austral still had a promising future, including the still-to-be-tested Cardiff-2A gas-condensate well and Cheal oil wells in PEP 38738, despite the unsuccessful development of the nearby Kahili field.
Infratil argued the prospects for junior explorers in onshore Taranaki were positive, with the recent lift in New Zealand gas prices likely to be sustained, allowing the profitable development of smaller, previously uneconomic gas fields.
Harker said knowledge gained from participation across the upstream and downstream sectors should enable Infratil to make better investment decisions and open opportunities for integrated investment strategies.
But in the short term, Infratil saw no specific linkages between Austral Energy and TrustPower, which presently had no gas-fired generation.
Infratil would also consider providing more capital should Austral Pacific require it.
"Infratil would look to support Austral Pacific should it require capital to maintain its interests in successful discoveries as these move from exploration to more substantive long-term production infrastructure investments,” Harker said.
HRL Morrison & Co manages Infratil, identifying and evaluating investment opportunities on its behalf, and operates from offices in Wellington, Brisbane and Berlin.
Infratil chairman David Newman, who is also chairman of Austral Pacific, was excluded from taking part in its consideration of this investment.
Austral said it had finalised the private placement of 4 million equity units, priced at US$2.50 each, to accredited investors in North America and New Zealand, with the major subscriber being Infratil.
The placement was oversubscribed, with New Zealand investors being scaled down to achieve the US$10 million limit.
Austral added that the financing proceeds would be used for ongoing exploration activities and working capital requirements.
