7 Jul 2009

Austral oilfield being sold to Canadian company

3:10 pm on 7 July 2009

Troubled oil and gas explorer Austral Pacific Energy is being wound down by receivers who are selling its oil-producing field to a Canadian company.

Austral was placed in receivership by banker Investec in May after struggling to repay the $16.8 million it owed. It lost nearly $US44 million in trading last year.

The receivers are in the process of selling its stake in the Cheal oil field in Taranaki to Tag Oil, a Canadian firm that held just over 30% of the joint venture.

Tag is paying $2 million in cash for the field, and an initial 25% royalty on oil sold, up to a certain volume.

The joint receiver of Austral Pacific Energy, Paul Sargison from Gerry Rea Partners, says it's a good outcome for Austral.

The sale now needs approval from the Ministry of Energy. Mr Sargison says the ministry has not indicated any likely hurdles to approval.