Auckland-headquartered Greymouth announced the deal yesterday evening, saying it had reached agreement to acquire NZOG's 35% interest in PMP 38148, which incorporates the Ngatoro and Goldie oil and gas fields.
Greymouth is now taking over as operator of Ngatoro and Goldie and planning considerable synergies by operating them in conjunction with its adjacent Kaimiro field.
Commentators see this Ngatoro acquisition as the next piece in the jigsaw to make Greymouth a significant second-tier Kiwi player behind such home-grown entities as Todd Energy and Austral Pacific and overseas-owned Origin, OMV and Swift Energy. Also, Greymouth has recently expanded staff numbers, taking on a geologist and an accountant.
They say that though NZOG might have wanted to retain control of Ngatoro, essentially its sole source of production income, getting out was a good thing.
"It's a smart move; Ngatoro is near the end of its economic life and NZOG wants to concentrate on the positive and its upcoming developments, rather than spending time and effort in disputes," said one commentator, referring to the publicised disagreements between Greymouth and first Austral Pacific then NZOG over the operation of Ngatoro-Goldie.
Last year the High Court stripped Austral Pacific (formerly Indo-Pacific Energy) of operatorship of the small Goldie oil pool and awarded that to Greymouth after a prolonged bitter row in and out of the courts. Austral later sold its Goldie and Ngatoro interests to Greymouth for an undisclosed sum.
Greymouth chief operating officer John Sturgess said Greymouth was pleased to have been able to conclude the latest agreement.
"This purchase allows Greymouth to derive the synergy benefits available from operating the Ngatoro production facilities in conjunction with Greymouth's facilities situated at the adjacent Kaimiro production station. We are now in a position to implement our own development plans for these Ngatoro interests, which will allow significant reductions in oil field operating costs and generate long term benefits."
NZOG today said it was selling its minority stake in Ngatoro to Greymouth for approximately NZ$8.3 million and that the usual regulatory approvals were expected by the end of the month.
"While Ngatoro has been a good source of revenues for many years, the field is about to enter a secondary recovery phase to restore reservoir pressure, which required a decision whether or not to make the necessary investment and stay with the asset for some further time," said NZOG chairman Tony Radford from Sydney.
"The fundamental differences within the venture in the last two years also influenced NZOG's decision to sell.
"We have other, potentially much bigger, fish to fry in the Kupe development, Pike River coal and the offshore prospects we'll start drilling just next month, " he added.
NZOG general manager Gordon Ward said the Ngatoro sale would realise a profit of NZ$6.5m which, together with proceeds from the recent sale of 4% equity in Kupe to Mitsui, would see NZOG holding in excess of NZ$20 million cash to advance its various projects.
NZOG had budgeted for an outlay of NZ$1.9m for the drilling of the Amokura and Pukeko offshore prospects in PEP 38460 during March-May, he added.
Sturgess said Greymouth was finalising plans for a concerted exploration probe for new deep gas reservoirs in the Kaimiro and Ngatoro fields and in other (unspecified) licence. Further information on this would be available shortly.
