Analysts expect a that trading in Pike River Coal shares, and those of its largest shareholder, New Zealand Oil and Gas, will be suspended when the NZX opens this morning [UPDATE: shares have now been suspended]. On the ASX, where both companies are dual
Analysts expect a that trading in Pike River Coal shares, and those of its largest shareholder, New Zealand Oil and Gas, will be suspended when the NZX opens this morning [UPDATE: shares have now been suspended].
On the ASX, where both companies are dual listed, a trading halt was requested and granted late Friday; it is expected to be carried over.
NZ Oil & Gas owns 29.4% of Pike River.
On the NZX Friday, Pike shares fell 4c, or 4.35%, to 88 New Zealand cents in New Zealand but brokers said news of the explosion at around 4.30pm had not spread and volume of trading was not large. The share price of shareholder New Zealand Oil and Gas fell 3c to 120.
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"Smacked" in Australia; 14.08% fall
James Smalley at Hamilton, Hindin, Greene said the dual-listed stock was "smacked" in Australia before it was placed on trading halt Friday afternoon. The shares were halted at 61 Australian cents, which equates to around 77 New Zealand cents, or a 14.08% fall.
"It was after the New Zealand market closed that we got the first inkling but the stock was sold off toward the end of the day," Mr Smalley said.
The trading halt in Australia did not go on until 5.40pm NZ time.
Gas concern discussed with investors
Mr Smalley said the company's executives had visited with investors this week and at that meeting the issue of gas in the mine had been discussed.
The mine had relatively high levels of methane and when coal is cut methane seeps out. However, the mine is a wet mine, which reduces the dust that can be ignited, investors were told.
Pike River shares fell 8.5% on October 19 after an operational review saw the company halve its production forecast for the year to June 11, from 620,000 tonnes to 320,000 – 360,000 tonnes of saleable coal.
The company only has funding until December.
BELOW: Pike River Coal (NZX: PRC); New Zealand Oil & Gas (NZX: NZO); 12-month charts courtesy NZX.
