NZOG delists from ASX

Exploration company New Zealand Oil & Gas (NZOG) delisted from the Australian stock exchange yesterday as the company strives to keep costs under control.

In the face of weak global oil prices, the ASX delisting is the latest in a string of cost savings for the exploration company. Australian shareholders will migrate to the New Zealand shareholder register.

NZOG relies heavily on its gas production assets in New Zealand to underpin cashflow.

In April, when NZOG applied to cancel the ASX listing, the company said its shares on the ASX consistently suffered from poor liquidity and low daily trading volumes.

NZOG says pulling out of the Australian exchange will save the company several hundred thousand dollars per year.

In late April, for the second time in six months, NZOG upgraded its estimated reserves in its 15% share of the offshore Kupe oil and gas field, in Taranaki.

In October, Kupe estimated reserves were upgraded by 34.7% and April's upgrade added a further 15.29%, from 5.22 million barrels of oil, equivalent to 6.02 million barrels.

In March, directors' fees were slashed by around 30% while some exploration activities were curtailed.

Chairman Rodger Finlay said at the time there was no intention to spend more on exploration, other than was required by contractual obligations in order to retain a permit.

Late in March, NZOG said it was "analysing concepts'' of whether there was a market in the South Island for an onshore plant for processing methane-rich gas.

The gas could potentially be used for electricity generation or replacement of coal in dairy plant operations.

Offshore from Oamaru, NZOG has permits for the Barque, Clipper 1 and Galleon 1 prospects, with Barque having the most potential.

However, there is at present no joint venture drilling partner or exploration programme in place.

simon.hartley@odt.co.nz

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