24 Nov 2010

NZOG share price rebounds

11:37 am on 24 November 2010

The share price of New Zealand Oil & Gas, which holds a 29% stake of Pike River Coal, has rebounded slightly in trading on the stock market, after plunging by more than a quarter on Tuesday.

Shares in the energy explorer rose 4 cents to 91c on Wednesdat morning.

New Zealand Oil & Gas shares were suspended from trading on Friday after the mine explosion.

The company's shares plunged 33 cents to 87c each on Tuesday when trading halt was lifted after being suspended from trading on Friday.

Analysts estimate Pike River Coal accounts for about a third of New Zealand Oil & Gas $1.20 per share price on Friday, which includes shares, options, convertible bonds and a $25 million loan facility.

NZ Oil & Gas says Pike River has borrowed $13 million of that facility and it will lend the rest if all the mine's secured creditors agree to holding off payments for 90 days.

The company's investment in Pike River cost about $82 million and were worth about $77 million at the end of June.

But Craigs Investment Partner's head of private wealth research, Mark Lister, says important questions about the company's exposure remain unanswered.

Pike River shares remain suspended on stock exchanges on both sides of the Tasman.

Mr Lister says that's the right approach at the moment.