Proposed Acquisition Of Central Petroleum Amadeus Basin Assets

Posted on 25 May 2021

New Zealand Oil & Gas Group agrees to purchase interests in 3 producing Northern Territory assets from Central Petroleum.
Agreement is subject to conditions, including shareholder approval.

14.5mmboe increase in 2P reserves; a near 5 times increase.*

Cash payment of A$29m, adjusted for revenues and costs from 1 July 2020, and development carry capped at A$40m.

New Zealand Oil & Gas to acquire 70%, Cue Energy (New Zealand Oil & Gas 50.04% owned subsidiary) to acquire 30%.

The New Zealand Oil & Gas Group has agreed to acquire interests in three gas producing projects located in Australia’s Northern Territory. The agreement is subject to shareholder approval, amongst other conditions.

The assets, in the Amadeus basin, are currently held by ASX-listed Central Petroleum.

The acquisition would increase the New Zealand Oil & Gas Group’s 2P (proved and probable) reserves by 14.5 million barrels of oil equivalent – a near five-fold increase, with further exploration upside potential.

The proposed transaction comprises a 25% interest in the Mereenie oil and gas fields, a 50% interest in the Palm Valley gas field and a 50% interest in the Dingo gas field.

New Zealand Oil & Gas will acquire 70% and Cue Energy Resources (New Zealand Oil & Gas’ 50.04% owned subsidiary) will acquire 30%, of assets sold by Central Petroleum. If the agreement is approved, Central Petroleum will receive a cash payment of A$29 million (New Zealand Oil & Gas will pay A$20.3 million, and Cue will pay A$8.7 million). The effective date is 1 July 2020, so the cash payment will be adjusted for revenues earned and costs incurred following that date.

New Zealand Oil & Gas and Cue Energy will also fund Central Petroleum’s share of the costs of exploration, appraisal and development up to a capped total of A$40 million. New Zealand Oil & Gas and Cue Energy will also be required to pay their own share of the costs. Development is expected to include four well recompletions and up to 10 wells.

Central Petroleum will remain as operator and manage the gas sales function on behalf of New Zealand Oil & Gas and Cue Energy under a joint marketing agreement.

New Zealand Oil & Gas Chief Executive Andrew Jefferies says the acquisition fits the company’s strategy for growing the business by acquiring production.

“The acquisition utilises New Zealand Oil & Gas cash and balance sheet strength. The assets have multiple development and exploration pathways to growth, which this deal will
unlock. It also helps achieve value for Cue shareholders, including New Zealand Oil & Gas, and puts our business on a growth trajectory,”

“Management and the board feel that this deal delivers what we promised in our revised strategy released June 2020 providing shareholders with a highly attractive, value adding, opportunity:


  • based on solid production, with development and exploration upside;
  • gas connected into an excellent market;
  • in an area we understand; and
  • sized to fit our balance sheet.

The board is pleased to unanimously recommend the transaction to our shareholders. It requires approval by a simple majority and the 69.9% shareholder O.G. Oil and Gas (Singapore) Pte. Ltd. has already confirmed it will vote in favour”.

“The fields are in Australia, where we are already listed, and produce gas for markets where prices are strong. They have an excellent seasoned operator in Central Petroleum with scale, culture, values, and technical skillsets that are an ideal fit with ours. Like NZOG, Australia values clean burning locally produced natural gas as a key part of the transition to a low carbon future.”

A special meeting of shareholders to vote on the transaction is expected in June and a Notice of Meeting will be sent to all shareholders shortly. It will contain further details of the transaction.

*See Reserves Statement below