Canadian energy company sells its NZ oil fields for $44 million

Canadian energy company Tag Oil is selling up and quitting New Zealand.

The oil and gas company is selling its half a dozen onshore fields in Taranaki to Malaysian firm, Tamarind, for $US30 million ($NZ44 million).

The Vancouver-based Tag has been in New Zealand for 16 years and has a string of small producing oil wells sprawled around Taranaki, but is going to follow prospects in Australia.

"TAG's New Zealand assets ... (present) an attractive premium to the current market value of the assets for TAG shareholders," chief executive Toby Pierce said.

"Further, the royalty and event specific payments provide continued exposure to future upside from the assets."

Mr Pierce said Tag would continue to take a share of the earnings from the New Zealand wells, as well as receive bonus payments if one of the the fields hits certain targets.

TAG is going to use the proceeds of the sale to pursue oil and gas prospects in Australia, although it made comment on its decision being linked to the government's ban on offshore oil and gas exploration and lack of onshore areas offered for exploration.

Tamarind is a Malaysian based company, which specialises in getting the last out of fields nearing the end of their life.

In the past year Tamarind has taken control of the offshore Tui oil field, with plans to drill new wells to find further supplies.

 

rnz.co.nz

Oil pump. Source: istock.com