10 Nov 2014

Big changes on oil explorer's board

6:10 pm on 10 November 2014

The director nominated by New Zealand Oil & Gas to the board of Pan Pacific Petroleum has withdrawn his consent to be nominated.

John Bay's withdrawal comes amid significant other changes to the Sydney-based oil explorer's board.

New Zealand Oil & Gas has owned 15 percent of Pan Pacific since 2008.

Mr Bay's decision follows Friday's announcement that another director, Mike Daniel, had decided not to stand for re-election to Pan Pacific's board at the annual shareholders meeting on Wednesday.

In August, Pan Pacific chairman Neil Tomkinson and another director, Joshua Pitt, resigned and sold the 9.4 percent of Pan Pacific's shares they owned.

Those shares appear to have been bought by Zeta Resources, which now owns 15.5 percent of Pan Pacific and which also owns 19.5 percent of New Zealand Oil & Gas.

Zeta chairman Peter Sullivan joined Pan Pacific's board in late September.

An analyst at Woodward Partners, John Kidd, said he had long been of the view that New Zealand Oil & Gas and Pan Pacific, which have interests in some of the same prospects, should merge.

Mr Kidd said the past five years had seen the destruction of much shareholder value at both companies.

At the end of September, Pan Pacific had $A18.6 million in cash, down from $A150 million in January 2009.

Mr Kidd said Pan Pacific's decision to drill the Oi prospect, which proved dry, was difficult to understand and was ultimately disastrous for its shareholders, but seemed to have served as a catalyst for much overdue change at Pan Pacific.

New Zealand Oil & Gas said it was pleased to see progress in decision-making at Pan Pacific and would continue to monitor the situation closely.

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