Bloomberg News

NZ Oil & Gas's Salisbury Says Turmoil Increasing Opportunities

October 29, 2008

New Zealand Oil & Gas Ltd. (NZO) Managing Director David Salisbury says falling equity markets and higher funding costs have increased the number of exploration projects becoming available. He also comments on a venture the company joined to explore the Barque prospect off the nation's South Island. Salisbury was speaking on a conference call after the company's annual meeting in Wellington.

On the financial crisis:

``The financial turmoil is causing distress for companies that are unfunded or under-funded and that is increasing the pool of opportunities for a company such as ours.

``They are coming under increasing financial pressure and their price expectations are dropping markedly.

``There are some better quality assets that we can see are being shaken loose by this process.

``Not all of them are opportunities that we can take advantage of.''

Recent opportunities the company reviewed in Australia were ``just too big,'' Salisbury said. He wouldn't identify them.

On Barque:

``We think the Barque prospect would be very attractive if we monetized the gas'' by bringing it ashore for power generation, Salisbury said.

``But it's also very attractive if you look at it from the perspective of stripping out the liquids'' and reinjecting the gas.

Barque may hold 600 billion cubic feet of recoverable gas and 58 million barrels of light oil, the company said Oct. 28.

Production may be possible in 2014 if seismic studies and then exploration drilling prove successful, Salisbury said today.

To contact the reporter on this story: Gavin Evans in Wellington at gavinevans@bloomberg.net

To contact the editor responsible for this story: Iain Wilson in Sydney at iwilson2@bloomberg.net


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