4 Nov 2014

NZOG to return $60m to shareholders

3:09 pm on 4 November 2014

New Zealand Oil and Gas is planning to return $60 million of capital, or 15 cents per share, to shareholders.

tui oil field

In the near term, NZOG expects increasing cashflow as production levels at the Tui oil field increase. Photo: PHOTO NZ

Chairman Peter Griffiths told the annual shareholders' meeting that the company would hold another meeting, hopefully before Christmas, to vote on the return.

He said the company has a robust balance sheet, no debt, and in the near term expects increasing cashflow as production levels of the Tui oil field increase.

However, shareholders were told that the company would not be paying dividends.

New Zealand Oil and Gas is not paying tax at the moment because its exploration expenses of nearly $75 million in the year to June are immediately tax deductable, meaning the company cannot pay tax-paid dividends.

Mr Griffiths said the company is looking to buy producing assets. He said there is a significant opportunity in the oil and gas sector to acquire production and reserves at attractive prices, and the company would seek transactions that can create compelling value for the business and the shareholders.

He said that broadly, the company would consider the quality of assets on offer, the value created and if a particular transaction can be done. His team is reviewing a number of possibilities.

New Zealand Oil and Gas would continue to explore new prospects, but would set a higher hurdle for investing cash due to the falling price of oil, Mr Griffiths said.

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