Pike River losses have impact on NZ Oil and Gas

12:02 pm on 31 January 2011

The closure of the Pike River Coal mine following the disaster that claimed 29 lives will force New Zealand Oil and Gas to report a "significant" half-year loss.

The energy explorer hasn't given a figure, but chief executive David Salisbury says says it's unlikely to be as much as its total $150 million investment in Pike River Coal, in which it had a 29% stake.

Pike River Coal is now in receivership.

Mr Salisbury says New Zealand Oil and Gas "will incur a significant accounting loss".

The Wellington-based company lost $6.5 million in the six months to December 2009.

Meanwhile, the company made revenue of $16.7 million from its interests in the Tui oil field and Kupe gas field in the last three months of the year, and noted oil prices hit two-year highs.

The company's share price plunged following the mine's explosions, and New Zealand Oil and Gas says the fall has been too great and doesn't reflect the strong rise in international oil prices, or the increase in reserves at Kupe.

The Tui oil field, in which New Zealand Oil and Gas has a 12.5% interest, made $7.8 million, and the Kupe gas field, in which it has a 15% stake, returned $8.9 million.

New Zealand Oil and Gas's shares on Monday morning fell 1 cent to 85 cents each.