NZ Oil & Gas Buys Mitsui's Kupe Stake

New Zealand Oil & Gas said July 6 it has agreed to buy Mitsui’s 4% stake in Kupe gas and light oil field offshore New Zealand for NZ$35mn (US$25mn).

The transaction was announced in May and was subject to the Kupe joint venture participants’ pre-emptive rights and other consents and approvals. Other Kupe joint venture participants have not exercised pre-emptive rights, said NZOG. However the deal remains subject to other consents and regulatory approvals; the effective date of the transaction is 1 January 2017.

Kupe comprises an offshore remote-operated production platform, a pipeline and umbilical cable to shore, and an onshore production facility near Hawera. NZOG previously held 15% of Kupe, which it sold to Genesis Energy January 1, 2017. The Mitsui stake will add 2.6mn boe to NZOG reserves.

"The sale of 15% and acquisition of 4% of Kupe has allowed us to maintain exposure to a quality asset while we are moving to diversify our portfolio. Previously, the company’s entire market capitalisation was reflected in the Kupe asset. Reducing this exposure to a single asset and returning NZ$100mn of capital to shareholders allows the company to diversify our risks and creates opportunities to pursue growth for shareholders alongside Kupe's ongoing returns," NZOG said.

Kupe is operated by Lattice Energy Resources, part of Australia's Origin Energy, which together with its related companies has a 50% interest. Genesis Energy, through its subsidiaries, holds a 46% interest. Both Genesis and NZOG are New Zealand-listed companies.

Shardul Sharma