NZOG sale swings in spotlight

The Securities Commission is investigating share trading in New Zealand Oil and Gas after the explorer's stock plunged 36 per cent before rebounding in recent months.

Sharebrokers have received two letters from the commission instructing them to provide details of people who bought or sold NZOG shares during March and April.

The second letter, sent last week, asked for more specific information about particular trades.

In the letter, commission investigator Phillip Rodrigues asks for "follow-up information relating to these clients:

* Their full name and address, the nature of their business.

* The names of the persons who instructed you on their behalf.

* The date and time the order was received and whether any price limit was stipulated.

* The details of underlying clients if any."

On April 22, the stock exchange asked NZOG to explain why its shares gained 10.5 per cent to 95c immediately before the company announced an upgrade of reserves at its Kupe field.

NZOG replied that trading in its shares had been volatile since April 11 and that the rise was in line with recent big price swings.

One broker said the first Securities Commission letter asked for general trading information in NZOG.

Such requests were relatively common after an unusual change in a company's share price or the volume of shares traded.

"They are now following up client by client, specific to those that they feel might have indulged in suspicious activity," the broker said.

NZOG's share price lost 5c to 85c in the days after the first letter was received by brokers, having traded around 90c for the preceding two weeks.

NZOG shares have had a rollercoaster ride this year and closed at 90c on Friday.

The shares spiked to $1.28 in early February before starting a steep slide a month later, bottoming out at 80c in mid-April, wiping $95 million off the value of the company.

The collapse of NZOG's share price could be because the company failed to provide financial information earlier promised on three projects in January or February, a broker said.

- NZPA