NZOG buyback to boost share price

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New Zealand Oil & Gas intends to buy back 8.5 million of its ordinary shares to boost its share price, which it says is "significantly below fair value".

With over 389 million listed shares, the NZOG share price closed up 4c or 4.17 per cent to $1.24.

"The NZOG board is of the view that the current share price is significantly below fair value and doesn't reflect a reasonable current valuation of the company, even without taking into account the growth prospects about which the board and management are confident," the company said. "A buy-back of shares at this time is an opportunity to provide a return to shareholders in excess of NZOG's cost of capital."

The company said it would continue to maintain a strong balance sheet to fund capital expenditure for ongoing growth initiatives.

NZOG last month reported a full year net loss of $3.3 million, compared with a $53 million profit a year earlier. The bottom line result for the year to June was affected by $30.7 million of exploration costs being expensed, unrealised exchange rate losses of $8 million, and an $11.5 million share in the loss of associate company Pike River Coal.

NZOG intends to buy back from September 10 and may continue up until June 30.

- NZPA