N.Z. Oil and Gas new float will raise $20M

Press, 24 June 1981, Page 23

N.Z. Oil and Gas new float will raise $20M

PA Wellington New Zealand Oil and Gas, Ltd, which is acquiring petroleum exploration licences offshore in the promising Taranaki basin, yesterday announced its intention to proceed with a $2O million public share float of 50c shares next month.

Although the prospectus won t be ready for distribution until mid-July. the directors released preliminary information in order to keep the market informed. Rcnouf and Company will be the underwriting brokers.

The chairman of the new company will be Dr J. S. Watt, who is also chairman of Mineral Resources (NZ). Ltd, one of the sponsors of the new float:

In a seperate statement to the Stock Exchange, Mineral Resources revealed that 20 per cent of the issue would be reserved for its shareholders. As to the balance of the issue, the directors of New Zealand Oil and Gas emphasised that the company will be seeking the widest possible participation by the New Zealand public.

Dr Watt emphasised that it was only proper that the exact details relating to the issue be made in the official prospectus of the company. Mineral Resources (NZ), Ltd, and the Australian listed oil explorer, Pan Pacific Petroleum NL, will be closely involved in supporting the new company's activities. Pan Pacific Petroleum announced in mid-June the discovery of a significant gas flow in its 41 per cent owned Tubridgi No. 1 well in Western Australia.

Confirming the earlier announcement that Mineral Resources shareholders would receive a preferential en titlement in the New Zealand Oil and Gas issue of shares to the public. . the Mineral Resources directors announced today:

(1) Of the New Zealand Oil and Gas issue of 40,000.000 50c shares up to 20 per cent (8 million shares) will be reserved for Mineral Resources shareholders who Will be entitled to have ap-

plications to this extent treated as preferential.

(2) Mineral . Resources shareholders standing on the register at the close of business on July 1 will be entitled to preferential applications to apply for shares in New Zealand Oil and Gas on the basis of one NZOG share for every one MR share held. Shareholders with less than 2.000 MR. shares will be entitled to an overriding preferential allocation of a minimum of 2.000 NZOG shares.

(3) Minimum application will be 500 shares. Applications in excess of 500 shares must be in multiples of 100 shares.

(4) The Mineral Resources shareholder entitlement is non transferrable and no formal quoted rights will attach to Mineral Resources shares.

(5) The Mineral Resources share register will be closed from July 1-15, 1981 for the purposes of determining entitlements.

It is expected that an NZOG prospectus together with application forms will be mailed to all Mineral Resources shareholders on or about July 16.

Individual investors subscribing for shares in New Zealand Oil and Gas should be able to deduct one third of the cost against their taxable income.

The directors of the company confirmed yesterday that it' was their intention to comply with provisions of the Income Tax Act which would make this possible.

Under Sections 159 A and 160 A of the Income Tax Act resident New Zealand individuals are entitled to a taxdeduction equal to one-third of the amount subscribed by them for shares in petroleum mining companies and mining holding companies.

the float'of New Zealand Oil and Gas will provide a major opportunity for the investing public to take advantage of these provisions which are designed to encourage greater public participation in this developing sector of the economy.

By keeping earnings much in line with operating costs New Zealand Oil and Gas intends in the initial stages to maintain the capital raised through its float for second stage exploration. In this way the company believes it can maintain an aggressive ongoing exploration prgramme for some time, thus preserving substantial capital for the later, low risk, appraisal stages. The company's deputy chairman (Mr Tony Radford) said that investment of the capital raised by New Zealand Oil and Gas would yield a projected annual investment income of some $3 million which, for the foreseeable future, would cover yearly seismic and other costs in the Taranaki Basin area.

Mr Radford said that the company's directors believed this form of financial control would appeal to investors who might otherwise be concerned about the capital base of the company being quickly eroded as a result of the high costs of off-shore exploration.

New Zealand Oil and Gas intends to “spread its risks" as far as possible by becoming involved in a number of licences in a variety of basin areas and by “farming out" to secure finance for major drilling programmes. Australian companies associated with the companyhave active joint ventures with several major petroleum companies and are well placed to introduce such potential partners to New Zealand Oil and Gas.