New Zealand Energy Corp. (NZ) (TSX-V:NZ), a junior Vancouver oil exploration company, is making the jump to oil producer, following the acquisition of oil assets in New Zealand.
The company has acquired four petroleum mining licences, wells, pipelines and other infrastructure from Origin Energy Resources Ltd., a subsidiary of Origin Energy Ltd. (ASX: ORG), for $42 million, plus 5% royalties on its petroleum licences.
The Vancouver company went public less than a year ago, and had not planned to acquire production infrastructure quite so quickly, Rhylin Bailie, NZ’s vice-president of communications and investors relations, told Business in Vancouver.
But when an opportunity to buy Origin’s assets came up, the company had the cash on hand to close the deal.
“Because we had just raised $63 million, we had the money in the bank and the ability to move quickly and execute this deal,” she said.
The acquisition gives the company a total of 26,907 acres in the main Taranaki Basin and the Waihapa production station in New Zealand. It also gives the company infrastructure that it can use to process and move its oil and gas, as well as oil and gas for other companies operating in the basin.
“We’ve gone from an explorer-developer to a company that actually has the infrastructure to not only process our own oil and gas, but also process the oil and gas from third-party producers in the region, so it’s another cash-flow generation opportunity,” Bailie said.
In addition to Origin’s assets, NZ has made four oil discoveries on other New Zealand properties for which it has permits.
