AUCKLAND, NEW ZEALAND: The New Zealand Oil & Gas Group has agreed to acquire interests in three gas producing projects located in Australia’s Northern Territory, Amadeus basin, currently held by Central Petroleum.

The acquisition would increase the New Zealand Oil & Gas Group’s 2P (proved and probable) reserves by 14.5 million barrels of oil equivalent – a near five-fold increase, with further exploration upside potential.

The proposed transaction comprises a 25% interest in the Mereenie oil and gas fields, a 50% interest in the Palm Valley gas field and a 50% interest in the Dingo gas field.

New Zealand Oil & Gas will acquire 70% and Cue Energy Resources (New Zealand Oil & Gas’ 50.04% owned subsidiary) will acquire 30%, of assets sold by Central Petroleum. If the agreement is approved,

Central Petroleum will receive a cash payment of A$29 million (New Zealand Oil & Gas will pay A$20.3 million, and Cue will pay A$8.7 million). The effective date is 1 July 2020, so the cash payment will be adjusted for revenues earned and costs incurred following that date.

New Zealand Oil & Gas and Cue Energy will also fund Central Petroleum’s share of the costs of exploration, appraisal and development up to a capped total of A$40 million. New Zealand Oil & Gas and Cue Energy will also be required to pay their own share of the costs.

Development is expected to include four well recompletions and up to 10 wells.

Central Petroleum will remain as operator and manage the gas sales function on behalf of New Zealand Oil & Gas and Cue Energy under a joint marketing agreement.

New Zealand Oil & Gas Chief Executive Andrew Jefferies says the acquisition fits the company’s strategy for growing the business by acquiring production.

“The acquisition utilises New Zealand Oil & Gas cash and balance sheet strength. The assets have multiple development and exploration pathways to growth, which this deal will unlock. It also helps achieve value for Cue shareholders, including New Zealand Oil & Gas,
and puts our business on a growth trajectory.”

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