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NZOG ready to target $35m annual exploration spend

Spending around $7 million on up to five projects each year now in pipeline.

Pattrick Smellie
Thu, 21 Jun 2012

BUSINESSDESK: New Zealand Oil & Gas is telling investors of a new phase now that it is in a position to start extracting value from the poil and gas exploration portfolio it has built over the past two or three years.

In a roadshow presentation for New Zealand investors, released to the NZX, chief executive Andrew Knight says the emerging focus is "different from the last few years".

"NZOG had been focused on opportunity assessment (acquisition) to achieve country entry and reserves targets," the presentation notes said.

"Acquisition will now focus on enhancing marketed position (capability). Building our own exploration opportunities will increase value and balance acquisition."

With interests in New Zealand, Indonesia and Tunisia, NZOG would be targeting exploration spends of about $35 million annually, averaging some $7 million on up to five projects each year through a combination of farm-out and farm-in.

The near-term opportunities are clearly identified, but a table in the presentation indicates there are plenty of gaps to fill from 2015 onwards.

Mr Knight indicated the deep-water Barque prospect, off the Canterbury coast, would prove challenging to develop.

While it was a "large prospect", it was expensive to drill. An international campaign to attract additional partners was under way, with a drill-or-drop decision due by the end of August.

NZOG shares were up slightly today, gaining 0.6% to 80 cents apiece.

Pattrick Smellie
Thu, 21 Jun 2012
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NZOG ready to target $35m annual exploration spend