NZ Oil & Gas gets $57m to fund Tui development

New Zealand Oil & Gas has secured the debt financing to fund its investment in the Tui area oil fields development.

The company said it had entered into a US$37.5 million ($57.1 million) financing agreement with the New Zealand branch of the Commonwealth Bank of Australia.

The finance facility will allow it to replenish the US$19.2 million already spent by it on capital items and contract deposits.

NZOG has also secured a minimum oil price of US$50/barrel for 448,000 barrels of early production through the purchase of "put" options.

Executive chairman Tony Radford said Tui was expected to generate a strong cash stream once production started in the first half of next year.

Initial flow rates from the fields are expected to be around 50,000 barrels a day.

The Tui fields are in the offshore Taranaki Basin and will be the country's first standalone offshore oil development.

NZ Oil & Gas holds a 12.5 per cent stake in the project. Its partners are New Zealand Overseas Petroleum (45 per cent), AWE NZ (20 per cent), Mitsui E&P NZ (12.5 per cent) and WM Petroleum Pan Pacific (10 per cent).

- NZPA