TAG Oil sells up and quits NZ

Otago Daily Times - - BUSINESS & MONEY -

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

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