NZ Oil & Gas misses out on stake in deepwater Taranaki permit

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BUSINESSDESK: New Zealand Oil & Gas has missed out on acquiring a stake in a deepwater exploration permit in the Taranaki basin after the existing partners exercised their right to buy it.

The Wellington-based company has been blocked from buying a 6.7% stake in the 16,380sq km petroleum exploration permit off the Taranaki coast after operator Anadarko and Hyundai Hysco exercised their first-buyer rights.

NZOG had agreed to pay $US9.5 million to the operation's minority partners, Global Resources Holdings and Randall C Thompson LLC.

"The existing partners have the opportunity to access the interest NZOG negotiated and have taken it," chief executive Andrew Knight says.

"NZOG is working on building itself to become the partner of choice for exploration in New Zealand so that, in future, a widely New Zealand-owned company can be involved in the opportunities deepwater exploration in New Zealand offer."

This week Houston-based Anadarko relinquished one of its Canterbury basin permits, while at the same time adding to an adjacent area in joint-venture with Contact Energy parent, Origin Energy.

Anadarko plans to bring a drillship to New Zealand in the 2013-14 drilling season.

In August, NZOG scuttled its option to drill the deepwater Barque project off the Canterbury coast after failing to find farm-in profits and after a review determined the risk profile was too high. That permit was next to the Anadarko-Origin area.

NZOG shares fell 1.1% to 87 cents in trading today and have climbed 25% this year.

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2 Comments & Questions

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Sounds like Andarko and Hyundi think they are sitting on something substantial and want to keep it to themselves - must be some convincing seismic data.

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I think it's rather a case of Anadarko and Hyundai Hysco having worked with original operator Global Resource Holdings and its owner Randall Thompson for several years. And they don't want the hassle of having another minor partner, NZOG, at the negotiating table.

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