The Dominion Post newspaper said today that Geoff Logan, a former director of FCE and Southern in the mid-1990s, confirmed last week that FCE subsidiary Petrocorp had advanced $NZ21.4 million ($A17.55 million) to takeover vehicle Petroleum Industries to boost the original NZ63c a share offer that investors had rejected by an additional NZ12c.

The 700 or so minority shareholders of Southern Petroleum - who are seeking about $NZ23 million (about $A18.8 million) in compensation from Shell Exploration New Zealand - said this was an "act of encouragement" from Petrocorp to Petroleum Industries to buy shares at an undervalued price, and this fulfilled the definition of insider trading legislation.

Logan admitted that he had been warned about the potential for insider trading laws to be breached, and as such felt that matters disclosed at a September 1995 meeting at Fletcher Challenge House in Auckland should not have included him, according to the paper.

Former FCE strategic planning manager Ken Humphrey admitted to the court the company's strategy at the time was about owning the majority of known gas reserves within Taranaki at that time "and through that ownership [we] were able to increase the price of gas".

However, Humphrey said the increased share price offer was not because of price-sensitive information. Rather, it was because of new exploration licences the Government had granted Southern Petroleum, to which Petrocorp had entitlements through a 1993 alignment agreement.

He also said that years of exploration in onshore Taranaki had yielded little in the way of commercially viable finds. Minority Southern shareholders received a fair price for their shares -of which Humphrey had owned 500,000.

Former Petrocorp managing director and Southern director Jim Patek denied allegations that he pushed through the compulsory purchase of Southern after learning the results of a deep gas study in onshore Taranaki.

The shareholders had argued that FCE was aware of the results of the study but withheld information about the potential of the area, which included Southern's stake in Mangahewa and in the exploration licence PEP 38459 that later yielded the 1 trillion cubic feet-plus Pohokura gas discovery.

However, Patek said those claims were unreasonable because he never saw many of the documents relied on in support of the insider trading allegations during 1995 and first saw them only at the start of the case, according to the paper.

Shell, which bought FCE's New Zealand assets in 2001, denies any liability. Under a previous ruling, it is also paying the costs of the High Court case, which is being heard in Auckland by Justice Hugh Williams and may not finish until mid-June.