8 Jul 2009

Austral Pacific Energy being wound down

7:00 am on 8 July 2009

A collapse in oil prices has contributed to the downfall of a company exploring prospects in New Zealand.

Oil and gas explorer Austral Pacific Energy is being wound down by receivers who are selling its oil-producing field to a Canadian company Tag Oil for $US2 million.

Austral was placed in receivership in May by its Investec after struggling to repay $16.8 million that it owed to the bank.

Crude oil prices hit a record $US147.27 per barrel on 11 July last year before crashing to $US32 per barrel in December, as the economic crisis battered global fuel demand.

It's recently been trading in the $US60s - well below its peak.

Joint receiver, Paul Sargison from Gerry Rea Partners, says the drop in oil prices contributed to Austral Pacific's troubles. He says the company has effectively run out of cash and agreement to sell the Cheal oil field in Taranaki is a good outcome.

Austral Pacific lost nearly $US44 million in trading last year.