As Pike River Coal's largest shareholder at 29.6%, NZOG was owed a total of about $65 million by Pike when tragedy struck on November 19 and closed the mine.
Some $40 million was owed in convertible bonds and notes and a further $25 million from a short-term loan, Craigs Investment Partners broker Peter McIntyre said.
Of the $25 million loan, $13 million was secured and $12 million was unsecured.
NZOG spun off and listed Pike River Coal from its stable of activities in May 2007 with an $85 million float. Pike River spent about $300 million over 10 years to get to production, before an underground explosion on November 19, in which 29 workers died.
Pike had a total of about $90 million in loans at the time, $65 owed to NZOG, $23 million to the Bank of New Zealand and a further $2 million to smaller creditors.
"It's fortunate for NZOG that it is in a very strong cash position, with no debt and having $175 million in cash . . . plus Kupe [oil and gas field] is back into normal production," Mr McIntyre said.
Mr McIntyre said Pike's business interruption insurance had a maximum payout value of $100 million and Craigs' research estimates about $60 million will be paid out. NZOG's share would be about about $33 million, which would be attributed to the convertible bonds and notes.
Craigs had lowered its 12-month target price on NZOG shares from $1.65 to $1.20, mainly because of the write-off of the Pike investment and exposure to the unpaid debt.
Mr McIntyre said offshore Kupe and Tui fields, in which NZOG has a share, were again performing according to expectations and resumption of production targets at Tui was likely to be sustained through to the second half of 2011.
Mr McIntyre said NZOG's board had been "working overtime" to ensure shareholder value in the stock was being maintained, by continuing with a share buy-back programme.
Since September, NZOG has spent almost $1 million in the share buy-back programme.
It announced its intention to buy back a total 8.5 million of its shares between September and this June this year, and would cancel them.
To date, in 20 separate purchases, it has gained about 10% of the 8.5 million shares, buying 826,000 shares worth a total $926,000 at an average price of $1.12.
Mr McIntyre noted that under receivership, there was still a possibility Pike River could be sold soon, which could see a further return to creditors.
