Trio of wells may save firm
Hopes are being pinned on three oil wells giving troubled oil and gas firm Tamarind Taranaki the ability to pay its bills to up to 100 local suppliers.
The Malaysian-owned firm was placed into voluntary administration after company directors issued a statement on Monday announcing it was ‘‘insolvent, or may become insolvent".
A meeting has been scheduled for next week in New Plymouth between the administrators and creditors.
Eanna Brennan, senior manager for administrators Borrelli Walsh, said the firm now had a 25-day moratorium to assess its ability to continue operating.
The company had struggled to meet its financial commitments since a $300 million welldrilling programme in the offshore Tui field was suspended in September after the first well proved dry.
Brennan said the well was plugged and abandoned and the company decided not to carry on with the programme using the semi-submersible COSL Prospector rig, which had been contracted to late-2019.
In October, Tamarind Taranaki did not renew a contract with BW Offshore for the floating production, storage and offloading vessel Umuroa after December 31 this year, putting 58 jobs at risk. The Umuroa processed crude oil from the Tui, Amokura, and Pateke wells in the Tui field, owned by Tamarind. Brennan said once the COSL Prospector left the drilling area there was potential to extract 1500 barrels a day from the existing three production wells. This would provide necessary funding to pay creditors.
The field contains up to 5 million barrels of oil, which would prolong the life of the field to 2022, he said.
‘‘The debt of the company was unsustainable but the underlying business is recoverable,’’ he said. ‘‘The administrators will be trying to assess where the business is going and identify suppliers to continue to work with.’’
Brennan said the decision did not affect Malaysian-based Tamarind Resources’ $48m onshore acquisition of TAG Oil, or other subsidiaries of the company.
At next week’s creditor’s meeting there would be a vote to form a committee to consult with the administrators and form a plan to work together under a deed of company arrangement, or DOCA, he said.
Taranaki Chamber of Commerce ceo Arun Chaudhari said the company’s debt position was ‘‘not encouraging’’ but not unexpected for the oil industry.
Financial statements provided by TT directors showed the company made a $4.8m loss after tax last year.
‘‘Taranaki has a resilient economy and there was confidence in the region while we transition towards 2050,’’ Chaudhari said.
Petroleum Exploration and Production Association of New Zealand spokesman Phil Rennie said they were hopeful a solution could be found.
‘‘Unfortunately business struggles aren’t unique and happen in all sectors from time to time,’’ he said.
‘‘There is still plenty of other positive industry activity happening in the region and this doesn’t affect that.’’