TAG Oil sells up and quits NZ

AUCKLAND: Taranaki oil and gas producer TAG Oil is selling its New Zealand operations for $US30 million ($NZ44 million) to Tamarind Resources, citing the lessfriendly environment for the oil and gas sector as one of its reasons for quitting the country.

One of the quiet achievers of the New Zealand petroleum sector, Toronto Stock Exchangelisted TAG has built up a portfolio of onshore oil and gas production after recapitalising the operations of Austral Pacific almost a decade ago.

It had pursued a sale to Tamarind after being approached by another party looking to buy its New Zealand operations, TAG’s vicepresident of corporate development, Chris Beltgens, told BusinessDesk.

‘‘There wasn’t a desire to exit, but there’s always a desire to maximise value for shareholders,’’ he said.

The company believed its share price had suffered from perception in North America that the Government’s ban on issuing new offshore oil and gas exploration permits would eventually move onshore too.

While New Zealand was ‘‘still quite a bit friendlier than most other places’’ as a place to do business, that had ‘‘changed and not for the better in the last year, year and ahalf’’.

‘‘We’re slightly immune to that, being onshore, but with the way the winds are blowing . . . it just seems that there’s a trend there that we can’t ignore.’’

While TAG might have been comfortable with that risk internally, ‘‘being a public company in Canada, with our shareholders based in the Canada, US and internationally, there is an investor perception and that weighs on our share price. People do ask about the potential for oil and gas in New Zealand, and we’ve always said it’s one of the bigger contributors to GDP in New Zealand and we don’t think it would be prudent for the Government to ignore that.’’ — BusinessDesk