Origin Energy Ltd., Australia's second-biggest power retailer, and Contact Energy Ltd. agreed to buy New Zealand oil and gas fields from Swift Energy Co. for $87.8 million.
Origin and New Zealand unit Contact will acquire seven fields in the Taranaki region, along with pipelines and the Rimu and Waihapa gas treatment stations, the companies said in a statement. Under a separate agreement with Sydney-based Origin, Contact will pay NZ$54 million ($41 million) for the Ahuroa field for redevelopment as a gas storage reservoir.
Origin is expanding its gas holdings in New Zealand, where delays developing new fields and rising demand are increasing power prices. It is already the biggest holder of exploration acreage in the country and is developing the offshore Kupe gas field in south Taranaki, near Swift's Rimu production station.
The ``assets are an attractive mix of mature, producing fields with prospects for in-fill drilling and potential oil and gas upside,'' Origin Managing Director Grant King said in the statement today. They offer ``immediate production and earnings'' as well as operating synergies for the Kupe project, he said.
Origin and New Zealand unit Contact will acquire seven fields in the Taranaki region, along with pipelines and the Rimu and Waihapa gas treatment stations, the companies said in a statement. Under a separate agreement with Sydney-based Origin, Contact will pay NZ$54 million ($41 million) for the Ahuroa field for redevelopment as a gas storage reservoir.
Origin is expanding its gas holdings in New Zealand, where delays developing new fields and rising demand are increasing power prices. It is already the biggest holder of exploration acreage in the country and is developing the offshore Kupe gas field in south Taranaki, near Swift's Rimu production station.
The ``assets are an attractive mix of mature, producing fields with prospects for in-fill drilling and potential oil and gas upside,'' Origin Managing Director Grant King said in the statement today. They offer ``immediate production and earnings'' as well as operating synergies for the Kupe project, he said.
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Contact, the biggest utility on New Zealand's stock exchange, rose 7 cents, or 0.9 percent, to NZ$8.13 at 11:10 a.m. in Wellington.
Contact, half owned by Origin, runs two of the country's five-largest gas-fired power stations. It is building geothermal plant and wind farms to avoid the rising cost of new fuel supplies.
Storage Project
Developing Swift's Ahuroa field as an underground gas store will restore flexibility lost in the company's newest fuel contracts and enable the company to hold gas when other, cheaper generation is available Contact Chief Executive officer David Baldwin said.
The project is likely to cost NZ$150 million during the next two years, including installing compressors and additional drilling, Contact said in a presentation on its Web site. The facility may be operating mid-2010, Contact said.
Houston-based Swift has operated in New Zealand since 1999. It sought bidders or partners for the unit in May, citing declining production and a lack of investor recognition for the reserves there.
The New Zealand fields produced the equivalent of 6.5 billion cubic feet of gas in the nine months ended Sept. 30, about 12 percent of Swift's total output in the period, the company reported Nov. 1.
Contact, half owned by Origin, runs two of the country's five-largest gas-fired power stations. It is building geothermal plant and wind farms to avoid the rising cost of new fuel supplies.
Storage Project
Developing Swift's Ahuroa field as an underground gas store will restore flexibility lost in the company's newest fuel contracts and enable the company to hold gas when other, cheaper generation is available Contact Chief Executive officer David Baldwin said.
The project is likely to cost NZ$150 million during the next two years, including installing compressors and additional drilling, Contact said in a presentation on its Web site. The facility may be operating mid-2010, Contact said.
Houston-based Swift has operated in New Zealand since 1999. It sought bidders or partners for the unit in May, citing declining production and a lack of investor recognition for the reserves there.
The New Zealand fields produced the equivalent of 6.5 billion cubic feet of gas in the nine months ended Sept. 30, about 12 percent of Swift's total output in the period, the company reported Nov. 1.
Via: Bloomberg|by Gavin Evans
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