Regulators blamed for latest Pike River float delay

New Zealand Oil & Gas has delayed for the third time this year the $160 million float of its Pike River Coal project, blaming regulators and the finalisation of new financing arrangements.

It also said hitches in building a road to the mine - on top of the Paparoa Range northeast of Greymouth - had knocked back planned production from the September quarter of next year to the December quarter.

NZOG general manager Gordon Ward said a $20 million investment in the project by India's Gujarat Coke in June and regulatory hurdles linked to listing the project on the Australian Stock Exchange as well as the local market had complicated the float.

He declined to say when NZOG was hoping to float the mine.

Gujarat's investment as well as the support of the project's other major investor - Indian coking coal company Saurashtra Fuels - indicated the project's potential.

"There is a huge amount of support for what we are doing. [The mine] is going to be good for New Zealand."

NZOG has never discussed the timing of the float publicly although sources familiar with the plan said the firm expected to float at the start of the year. In June, the firm was forced to delay until August, while details of Gujarat's investment were finalised.

The delay to production is the second this year and compares with an original production date at the end of this year.

Ward blamed the road delay on the harsh South Island winter, but said it was not significant when compared to the 20-year life of the project.

NZOG's shares last night rose 3c to 91c.

The firm is seeking to raise between $40 million and $60 million to help fund the development of a mine, expected to achieve a market value of $160 million.

Gujarat will buy 40 per cent of production at market prices for the life of the mine. This is equivalent to about 400,000 tonnes a year worth about US$50 million ($78 million). Its stake in Pike will be linked to the share price set at the float.

Saurashtra Fuels bought its 10.6 per cent stake last year for $17 million.

Meanwhile, NZOG said the increase in Pike River's value, interest income and foreign exchange gains lifted net profits to $2.41, reversing last year's $2.6 million net loss.

The profit came after writing off $800,000 of exploration costs.

During the year, NZOG group invested $43 million in its three development projects - the Kupe and Tui oil and gas projects in Taranaki and Pike River. As at June 30 it held cash of $41.7 million.