Page 26 - OGA-Sept-2015
P. 26
NEW ZEALAND
OIL & GAS AUSTRALIA
Origin cuts Contact in stake sale
AUSTRALIA’S Origin Energy has raised and it has lower financial leverage on a was in a strong position for future success.
about NZ$1.8 billion after the sale of standalone basis, the divestment will further “I remain strongly of the opinion that the
its 53.09 per cent stake in New Zealand increase Origin’s existing exposure to oil
electricity generator Contact Energy to price volatility as the Australia Pacific LNG capital investments we have made in recent
strategic investors. project ramps up,” he said. years position Contact well for the New
Zealand market and I am excited to lead the
The sale also saw Moody’s downgrade its Origin will use funds raised from the sale business in capitalising on this position with
credit rating for the group, in line with the to repay debt and redeem NZ$200 million an expected improvement in earnings in
expectations of Origin executive director of redeemable preference shares issued financial year 2016,” he said.
finance and strategy, and Contact board by Origin Energy Contact Finance No.2
member, Karen Moses. Limited. Conducted on the New Zealand Stock
Exchange, the shares were sold at NZ$4.65
Ms Moses predicted that the ratings The company will continue to hold each to New Zealand retail investors and
agency would revise its credit rating from upstream production and exploration institutional investors from around the
Baa2 (negative outlook) to Baa3 (stable), interests in New Zealand following the sale, world.
reflecting their view of a reduction in with Ms Moses saying the deal would reduce
earnings diversity following the sale. financial risk and deconsolidate debt. Mr Barnes will be appointed a permanent
employee of Contact following the deal,
“The expected revision of Origin’s rating Origin managing director Grant King said retaining his role as chief executive, while
to Baa3 (stable) will harmonise the ratings sale proceeds would provide the group with current board member Phil Pryke will
from Moody’s and Standard & Poor’s and increased financial flexibility in the short to assume the role of interim chair following
does not have a material impact on Origin,” medium term. the resignation of Origin-linked directors
Ms Moses said. Mr King, Ms Moses and David Baldwin.
“Today’s announcement is consistent
Her view was validated by Moody’s with Origin’s stated intention to continue to Contact is also preparing to list on the
vice president and senior analyst Spencer take action to reduce operating and capital Australian Securities Exchange following
Ng, who announced ratings would be costs, realign debt across group entities, and, the completion of the deal.
downgraded to BAA3 with a stable outlook where appropriate, divest assets,” he said.
if the transaction proceeded – saying the It follows a deal signed by the company
deal would not materially improve the Contact recorded a 43 per cent fall in net with Meridian Energy that was to see it
group’s financial leverage. profit for the 2014-2015 financial year to provide 80 million watts of energy to the
NZ$133 million, down from NZ$234 million Tiwai aluminium smelter for between four
“Because Contact’s earnings are the year before. and 14 years, starting from January 2017. l
uncorrelated with the rest of the group
Speaking after the sale, Contact chief
executive Dennis Barnes said the company
Tag expects revenue dip NZOG records loss after
Tui writedown
REVENUES and cash flow for Taranaki into the third and fourth quarters as the
basin-focused Tag Oil are expected to dip company focused its workover program over NEW ZEALAND Oil & Gas (NZOG) made a
lower in the September quarter on the back the coming months. net loss of NZ$6.2 million in the 2014-2015
of lower oil prices and production numbers. financial year after writing down the value
“Further, Q2 pricing has been below our of its stake in the Tui oilfields by NZ$36.3
Tag recorded a revenue of C$10.4 million forecasted US$60 per barrel Brent price so million.
during the June quarter, up seven per cent we have made the decision to defer some of
on the C$9.7 million earned in revenue the larger capital expenditures until later NZOG said the value of the Tui assets had
during the previous quarter, but down on in the year and/or until we see better oil been impaired by lower oil prices, bringing
the C$15.6 million recorded over the same pricing,” he said. forward the date when production from the
time last year. asset is expected to become uneconomic.
“Overall, TAG is in an excellent position
The results, released to the Toronto Stock to weather this downturn and I continue to The company had generated a profit of
Exchange on 17 August, are reported as Tag gain confidence in both the strength of the NZ$10.1 million the previous year.
Oil’s first quarter results for the fiscal year assets and the recovery of the oil markets.”
ending 31 March 2016. Despite this, revenue for 2014-2015 was up
Over the coming year, Tag said it by NZ$12.6 million to NZ$116.2 million, while
Tag Oil chief executive Toby Pierce would focus on growing its baseline earnings before interest, tax, depreciation,
said the company’s first quarter results reserves, production and cash flow in the amortisation and exploration was higher, at
were slightly ahead of expectations as it Taranaki basin via low-risk workovers and NZ$77.1 million, from NZ$75.4 million.
maintained cash flow positive operations re-completion of bypassed zones in existing
despite a weak oil price market, adding that wells. NZOG chief executive Andrew Knight said
this would not continue into the second higher volumes of oil and gas had offset the
quarter, due to lower production. It will also seek potential joint venture lower oil prices, while the acquisition of Cue
or farm-in partners to help it pursue high- Energy had led to increased revenue.
“The lower production is due to several impact exploration and establish production
wells that are offline, and we’ve shut in a within the deeper Kapuni formations in Opportunities for acquisitions existed but
moderate amount of production for safe the Taranaki basin, while also looking for the company would wait in order to enhance
operations while conducting our workover partners in the Kaheru joint venture acreage shareholder value, he said, with the group
program,” he said. in the Taranaki basin. l looking to optimise existing assets instead.
However, production was likely to increase “I expect to see more value from our
producing assets in the coming year,” he said. l
24 ENERGY PUBLICATIONS CELEBRATING 34 YEARS OF PUBLISHING IN AUSTRALIA
OIL & GAS AUSTRALIA
Origin cuts Contact in stake sale
AUSTRALIA’S Origin Energy has raised and it has lower financial leverage on a was in a strong position for future success.
about NZ$1.8 billion after the sale of standalone basis, the divestment will further “I remain strongly of the opinion that the
its 53.09 per cent stake in New Zealand increase Origin’s existing exposure to oil
electricity generator Contact Energy to price volatility as the Australia Pacific LNG capital investments we have made in recent
strategic investors. project ramps up,” he said. years position Contact well for the New
Zealand market and I am excited to lead the
The sale also saw Moody’s downgrade its Origin will use funds raised from the sale business in capitalising on this position with
credit rating for the group, in line with the to repay debt and redeem NZ$200 million an expected improvement in earnings in
expectations of Origin executive director of redeemable preference shares issued financial year 2016,” he said.
finance and strategy, and Contact board by Origin Energy Contact Finance No.2
member, Karen Moses. Limited. Conducted on the New Zealand Stock
Exchange, the shares were sold at NZ$4.65
Ms Moses predicted that the ratings The company will continue to hold each to New Zealand retail investors and
agency would revise its credit rating from upstream production and exploration institutional investors from around the
Baa2 (negative outlook) to Baa3 (stable), interests in New Zealand following the sale, world.
reflecting their view of a reduction in with Ms Moses saying the deal would reduce
earnings diversity following the sale. financial risk and deconsolidate debt. Mr Barnes will be appointed a permanent
employee of Contact following the deal,
“The expected revision of Origin’s rating Origin managing director Grant King said retaining his role as chief executive, while
to Baa3 (stable) will harmonise the ratings sale proceeds would provide the group with current board member Phil Pryke will
from Moody’s and Standard & Poor’s and increased financial flexibility in the short to assume the role of interim chair following
does not have a material impact on Origin,” medium term. the resignation of Origin-linked directors
Ms Moses said. Mr King, Ms Moses and David Baldwin.
“Today’s announcement is consistent
Her view was validated by Moody’s with Origin’s stated intention to continue to Contact is also preparing to list on the
vice president and senior analyst Spencer take action to reduce operating and capital Australian Securities Exchange following
Ng, who announced ratings would be costs, realign debt across group entities, and, the completion of the deal.
downgraded to BAA3 with a stable outlook where appropriate, divest assets,” he said.
if the transaction proceeded – saying the It follows a deal signed by the company
deal would not materially improve the Contact recorded a 43 per cent fall in net with Meridian Energy that was to see it
group’s financial leverage. profit for the 2014-2015 financial year to provide 80 million watts of energy to the
NZ$133 million, down from NZ$234 million Tiwai aluminium smelter for between four
“Because Contact’s earnings are the year before. and 14 years, starting from January 2017. l
uncorrelated with the rest of the group
Speaking after the sale, Contact chief
executive Dennis Barnes said the company
Tag expects revenue dip NZOG records loss after
Tui writedown
REVENUES and cash flow for Taranaki into the third and fourth quarters as the
basin-focused Tag Oil are expected to dip company focused its workover program over NEW ZEALAND Oil & Gas (NZOG) made a
lower in the September quarter on the back the coming months. net loss of NZ$6.2 million in the 2014-2015
of lower oil prices and production numbers. financial year after writing down the value
“Further, Q2 pricing has been below our of its stake in the Tui oilfields by NZ$36.3
Tag recorded a revenue of C$10.4 million forecasted US$60 per barrel Brent price so million.
during the June quarter, up seven per cent we have made the decision to defer some of
on the C$9.7 million earned in revenue the larger capital expenditures until later NZOG said the value of the Tui assets had
during the previous quarter, but down on in the year and/or until we see better oil been impaired by lower oil prices, bringing
the C$15.6 million recorded over the same pricing,” he said. forward the date when production from the
time last year. asset is expected to become uneconomic.
“Overall, TAG is in an excellent position
The results, released to the Toronto Stock to weather this downturn and I continue to The company had generated a profit of
Exchange on 17 August, are reported as Tag gain confidence in both the strength of the NZ$10.1 million the previous year.
Oil’s first quarter results for the fiscal year assets and the recovery of the oil markets.”
ending 31 March 2016. Despite this, revenue for 2014-2015 was up
Over the coming year, Tag said it by NZ$12.6 million to NZ$116.2 million, while
Tag Oil chief executive Toby Pierce would focus on growing its baseline earnings before interest, tax, depreciation,
said the company’s first quarter results reserves, production and cash flow in the amortisation and exploration was higher, at
were slightly ahead of expectations as it Taranaki basin via low-risk workovers and NZ$77.1 million, from NZ$75.4 million.
maintained cash flow positive operations re-completion of bypassed zones in existing
despite a weak oil price market, adding that wells. NZOG chief executive Andrew Knight said
this would not continue into the second higher volumes of oil and gas had offset the
quarter, due to lower production. It will also seek potential joint venture lower oil prices, while the acquisition of Cue
or farm-in partners to help it pursue high- Energy had led to increased revenue.
“The lower production is due to several impact exploration and establish production
wells that are offline, and we’ve shut in a within the deeper Kapuni formations in Opportunities for acquisitions existed but
moderate amount of production for safe the Taranaki basin, while also looking for the company would wait in order to enhance
operations while conducting our workover partners in the Kaheru joint venture acreage shareholder value, he said, with the group
program,” he said. in the Taranaki basin. l looking to optimise existing assets instead.
However, production was likely to increase “I expect to see more value from our
producing assets in the coming year,” he said. l
24 ENERGY PUBLICATIONS CELEBRATING 34 YEARS OF PUBLISHING IN AUSTRALIA
