Last week's purchase of Mitsui E&P's 35 per cent interest in the Tui oil and gas field was at a "really cheap price", but has inexplicably failed to significantly move the share price of the main apparent beneficiary, New Zealand Oil & Gas, says Wellington investment banker Mark Clare.
An analysis from Clare Capital says the deal effectively sold the Japanese oil major's stake at the equivalent of US$7.16 per barrel of oil equivalent, when the world market price is around US$108.80, based on published data of remaining Tui reserves.
Edison International oil and gas analyst John Kidd has also said he believes the deal undervalued the Mitsui stake by around 70 per cent.
Further evidence that the deal was value-adding for NZOG is the substantial security-holder notice issued by the Wellington-headquartered firm's largest shareholder, Zeta Resources, managed by Australian-based expat New Zealander Duncan Saville and business partner Dugald Morrison.
Zeta declared it had increased its NZOG holding from 8 per cent to 9.24 per cent the day after the October 3 announcement of the Tui transaction, which saw other joint venture partners, AWE and Pan Pacific Petroleum, also taking proportionate shares of the Mitsui stake.
