KEY POINTS:
New Zealand Oil & Gas sees a silver lining in the financial chaos which has sparked a plunge in oil prices.
From a high of US$147 a barrel in July oil prices have more than halved, but with cash in the bank the number of opportunities opening up for the company was growing quickly, chief executive David Salisbury said.
These range from the very attractive still beyond its financial reach in Australia to others he described as "moose pasture" - good for grazing animals but not drilling for oil.
"Six months ago when we talked to people about doing deals it was difficult to get them to engage on our terms - people had quite unrealistic price expectations."
Potential partners told NZOG then they would go to equity and debt markets instead.
"Of course as [those] markets have dried up and people have funding obligations they're coming under enormous financial pressure. Their price expectations are dropping markedly.
"It's certainly the case that financial turmoil is causing distress for companies that are unfunded or underfunded but that increases the pool of opportunities for a company such as ourselves."
Ones that come available first are the lower quality ones but there were some good quality assets that were distressed.
Shareholders at the company's annual meeting were told it was debt free with cash reserves of $245 million.
Salisbury was coy on what the company would do next.
Confidentiality requirements and commercial sensitivities meant the company would not reveal the targets it was after.
"I can say that we have looked at quite a long list of opportunities and walked away from most of them."
Some shareholders had questioned why it was looking beyond New Zealand.
"Quite simply, we want to cherry pick the best investments and there are not enough opportunities to choose from in New Zealand alone."
Oil shot up as much as 6 per cent to over US$66 after stock markets rallied yesterday but some analysts say it could head towards US$50 as recession bites around the world. It was trading yesterday afternoon at US$65.05.
Salisbury said NZOG's commitment to 12.5 per cent of the Tui field off Taranaki was made when oil was at US$50 a barrel.
There were about 32 million barrels to be recovered from Tui until 2020 and oil and LPG expected from Kupe until 2025. NZOG was putting store in forecasts by international agencies that demand would increase by between 40 per cent and 70 per cent by 2030.
* A vote on increasing non-executive directors' fees from a total of $340,000 to $600,000 was passed with the support of 70,500 votes. Just on 30,000 voted against and 9000 abstained.
