New Zealand Oil & Gas [NZX: NZO] has completed protracted negotiations over historic royalties owed by Genesis Energy on its share of the Kupe oil and gas field's production, giving the company a one-off $5 million after tax lift to earnings in the current financial year and an expected increase in ongoing revenue of between $1 million and $2 million a year.
The company continues to negotiate the over-riding royalty issue with Origin Energy, the other major stakeholder in Kupe.
The royalties issue originated from transactions in the 1980's, when National Petroleum acquired 89 percent of the Kupe permit and agreed to pay over-riding royalties to the parties it acquired the licence interest from.
"Complex corporate reorganisations and transfers since have affected tolse arrangements," said NZOG in a statement to the NZX.
Meanwhile, Austrian oil and gas producer OMV has lodged an application under the new legislation governing activity in New Zealand's offshore Exclusive Economic Zone, to continue drilling up to seven wells in the Maari permit.
While drilling currently under way was covered by transitional provisions in the EEZ Act, those ceased on June 28 and requires a consent to continue drilling beyond that date.
Its marine consent application is now open for public submissions.