Wellington-headquartered NZOG today announced a total of $175 million in equity and bank financings, including a placement of 17.5 million new shares and options, as well as its first ever rights offer of shares.
This was to drive its oil and gas developments and to “rapidly advance” the search for additional reserves in its permit areas.
Westpac Banking is to project fund the bulk of NZOG’s 15% investment in Kupe, arranging a $125 million loan facility and a $10 million letter of credit facility to support contractor guarantees.
NZOG said these bank facilities were in addition to the $20 million cost overrun facility available to it from fellow Kupe partner, and major electricity and gas player, Genesis Energy.
NZOG is also arranging about $15 million of additional working capital for its Tui Area project – a small portion of which is to cover increasing development costs with the rest allocated for finding additional reserves.
NZOG general manager Gordon Ward told PetroleumNews.net this morning that NZOG expected to raise about $40 million from the 17.5 million new shares and 5.83 million new options.
About $25 million of this new capital would go to pay for Kupe and the rest would be additional working capital.
“Most of the rest will be spent in one form or another on exploration opportunities – we are always looking to pick up additional acreage,” he told PNN, though he declined to specify what that additional acreage might be.
Executive chairman Tony Radford said the Kupe development was progressing well and earthworks had begun at the site of the onshore production station.
“And the company is well on the way to achieving oil production from the Tui Area with the Ocean Patriot moving into position to commence drilling in the Taranaki Basin,” he said.
NZOG will participate in seven of the 10 wells the Ocean Patriot semi-submersible rig is about to start drilling off Taranaki – four Tui development wells, the Tieke-1 and Taranui-1 near field appraisal wells, and the Hector-1 wildcat.
NZOG has made a placement of 17.5 million new shares and 5.83 million June 2008 options to New Zealand-based institutional and other investors, at an issue price of $1 per share. The options are issued at a rate of one option for every three shares, the same class as previous June 2008 options.
The 1:10 rights offer of new shares, with a June 2008 option attached, would also be issued at $1 each.
The Kupe partners are operator Origin Energy (50%), Genesis Energy (31%), NZOG (15%) and Mitsui E&P NZ (4%).
The Tui (PMP 38158) partners are operator AWE NZ (42.5%), Mitsui E&P NZ (35%), NZOG (12.5%) and Pan Pacific Petroleum (10%).
The PEP 38483 (Hector) partners are operator AWE NZ (44.317%), NZOG (18.864%), Mitsui E&P NZ (22.728%) and Pan Pacific (14.091%).
