NZOG Gets Ok to Buy Mitsui's 4% Stake in Kupe Gas Field

New Zealand Oil & Gas (NZOG) has received the go ahead from the Overseas Investment Office and from New Zealand Petroleum & Minerals to purchase Mitsui E&P Australia's 4% interest in the Kupe gas and light oil field, the company said December 12.

New Zealand Oil & Gas will pay NZ$35mn ($24.3mn) in cash on completion of the transaction. This acquisition is expected to add 2.6mn barrels of oil equivalent, made up of 11.27PJ of gas, 0.37mn boe of condensate, and 47,564 metric tons of LPG, to NZOG’s reserves.

Kupe is offshore from South Taranaki and comprises an offshore remote-operated production platform, a pipeline and umbilical cable to shore, and an onshore production facility near Hawera. The transaction was announced in May and the effective date of the transaction is January 1, 2017. All conditions required for completion of the transaction have now been satisfied and the transaction is expected to complete within the next ten days.

Commenting on why the company bought the 4% stake and sold 15% stake on the same effective date, NZOG said: “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.”

Kupe is operated by Origin Energy, which together with its related companies has a 50% interest. Genesis Energy, through its subsidiaries, holds 46%.