New Zealand Oil & Gas Ltd. (NZOG) has bought back into Kupe oil and gas field in the offshore Taranaki basin offshore New Zealand’s North Island. NZOG paid a lower price than it sold to Genesis Energy Ltd. in November 2016.
NZOG’s return has come about through the purchase of Mitsui E&P’s 4% interest in the field for $35 million (NZ). The effective transaction date is Jan. 1, which means it comes about 8 weeks after NZOG sold its original 15% holding to Genesis for $168 million (NZ).
The deals suggest Genesis valued Kupe at $1.1 billion and Mitsui at $875 million.
Genesis paid the premium because it enabled that company to increase its interest to 46% from 31%, help to meet its integrated fuels policy, and provide a quick boost to earnings.
NZOG Chief Executive Officer Andrew Jefferies said the combined transactions allowed his company to better diversify its portfolio by using the funds freed up by the earlier sale to buy other assets.
NZOG still sees Kupe as a high-quality field.
The deal with Mitsui requires regulatory approvals and agreement from the joint venture partners who have first right of refusal.
Kupe field, first discovered in 1986, came on stream in 2009. The field is operated by Sydney-based Origin Energy Ltd. with 50%. Genesis has 46% and NZOG will have the remaining 4% if the deal is approved.
