New Zealand Oil & Gas Limited Annual Report 2006 Annual Report
New Zealand Oil & Gas Limited Annual Report 2006 CONTENTS 2 Executive Chairman’s Report 3 Highlights 4 Operations Report 13 Reserves and Resources 16 Financial Statements 35 Audit Report 36 Corporate Governance Statement 38 Shareholder and Optionholder Information 40 Statutory Information 41 Corporate Directory
Investing in New Zeala
© Robert Garvey www.garvey.com.au ANNUAL Shareholders of New Zealand Oil & Gas Limited are GENERAL invited to attend the 2006 Annual General Meeting MEETING at the Crowne Plaza Hotel, Elliott Rooms, 128 Albert Street, Auckland on Thursday 26 October 2006 at 11am.
COMPANY New Zealand Oil & Gas Limited (“NZOG”) is an PROFILE independent company listed on the New Zealand and Australian stock exchanges. NZOG is a founding partner in two important petroleum developments in the offshore Taranaki Basin, New Zealand – the Tui Area oil fi elds and the Kupe gas/oil fi eld – and has exploration interests in several Taranaki oil and gas prospects. NZOG is the cornerstone shareholder in a major coking coal mine project under development in New Zealand’s South Island.
2006 The 2006 Annual Report of New Zealand Oil & Gas ANNUAL REPORT Limited is approved for and on behalf of the Board.
R F Meyer R A Radford Director Director 1 12 September 2006 12 September 2006 New Zealand Oil & Gas Limited Annual Report 2006 a land’s Energy Future
New Zealand Oil & Gas Limited NZ Reg. Coy. No. WN 037 842 ARBN 003 064 962 EXECUTIVE CHAIRMAN’S REPORT
Dear Investor,
I am pleased to report to you that in the last year we have achieved signifi cant progress on the projects which will transform NZOG into a signifi cant energy producer. All three of the company’s key projects were given the development go-ahead during this 12 month period.
The Tui Area development decision was made in November 2005 with oil scheduled to fl ow from this fast- tracked development in the fi rst half of 2007. All Kupe joint venture partners agreed in June 2006 to proceed with the Kupe development which will contribute 15% of New Zealand’s gas supply once onstream in 2009. At Pike River, NZOG gave the go-ahead for development of the export coking coal mines in September 2005. Construction and fabrication activities, including the appointment of leading international construction partners, are now well advanced for each of these projects.
In addition to its key developments, NZOG is embarking on an exploration program aimed at further increasing the company’s existing petroleum reserves which, on an oil equivalent basis, stand at 13.4 million barrels. Two attractive oil opportunities identifi ed within the Tui Area permit, close to existing discoveries, will be drilled in mid-2007. The same drilling rig has also been secured for the Hector prospect, a very interesting exploration prospect to the south of the Tui discoveries.
The fi nancial result for the year ended 30 June 2006 saw NZOG record a profi t of $2.3 million (after minority interests) on revenues of $7.5 million, including a $2.5 million accounting gain in respect of NZOG’s shareholding 2 in Pike River Coal Limited and after writing off exploration costs of $0.8 million. This is a satisfactory result New Zealand Oil & Gas Limited given that the company has yet to bring its production projects on stream.
Last year’s successful share option conversion raised $43 million and was pivotal in enabling NZOG to proceed with its three developments. A further $12 million was raised through a small placement of shares and options in December 2005 and Pike River Coal Limited raised $37 million directly from two major new investors.
As signifi cant investments will continue during the 2006/2007 year, debt raisings are also in progress for both
Annual Report 2006 the Kupe and Pike River projects. The company secured a $60 million (US$37.5 million) fi nancing facility for Tui in March 2006.
The return on investment from these developments will commence with Tui in the 2007 fi nancial year, which will enjoy a high front end revenue stream, with somewhat longer time-frames for Pike River and Kupe which are both long life assets with production expected over 15-20 years.
In summary, NZOG has taken major steps in the year under review to transform itself into a signifi cant energy production company and is positioned for continued strong growth.
R A Radford Executive Chairman 12 September 2006 HIGHLIGHTS
Developments • Tui, Pike and Kupe developments get green light • Tui NZ$60m debt facility achieved • Successfully completed NZ$37m capital raising for Pike River Coal
Exploration • Hector, Tieke and Taranui wells scheduled to be drilled • Felix/Opito Updip transition seismic survey completed • Further Kupe potential being evaluated
Corporate 3
• NZ$12m raised from institutional share placement New Zealand Oil & Gas Limited • Free bonus options issued to all shareholders Annual Report 2006 OPERATIONS REPORT
Tui Area Oil Development
PMP 38158 NZOG STAKE 12.5%
Tui fast-tracked for development of New Zealand’s fi rst dedicated offshore oilfi eld
First Oil: First oil production from the Tui Area oil scheduled timing. Prosafe Production Services Pty fields is projected to flow in the June 2007 quarter. Ltd has been contracted to build, own and operate A combination of initial high flow rates and high oil the FPSO, under a 5 year contract. The term contract prices will generate strong front end cashflow for value is US$178 million which the Tui joint venture can NZOG. The high quality Kapuni sand reservoirs are extend by five one year options. Prosafe is a major expected to yield approximately 30% of reserves global owner and operator of floating production and in the first 12 months. On that basis, at a price of storage vessels. Drilling of the Tui production wells US$65/barrel, NZOG’s gross oil sales revenues from is to commence in the December 2006 quarter, to Tui in the first production year would total NZ$70 synchronise with the arrival of the FPSO in the March million. NZOG’s share of Tui proved and probable oil 2007 quarter. reserves is 3.5 million barrels. Oil Offtake: The project facilities are designed for The Tui Area development encompasses the Tui, a maximum initial oil flow rate of 50,000 barrels of Amokura and Pateke oil pools discovered by NZOG and oil per day. Production rates are initially high but its co-venturers in 2003/2004. The development, in a have a relatively rapid rise in water production and water depth of 120 metres, involves four horizontally associated decline in oil rate. The FPSO oil storage drilled and subsea completed wells, each of which capacity will be approximately 600,000 barrels, to will be individually tied back to a leased Floating enable the efficient use of a range of differently Production Storage and Offloading vessel (“FPSO”). sized oil tankers for transport to market. Mitsui & Co have been appointed to market Tui oil. The Construction: The Tui joint venture partners made a predominant market for the light sweet Tui Area oil 4 unanimous decision to fast-track the development is expected to be the Asia Pacific region, including
New Zealand Oil & Gas Limited of the Tui Area oil fields in November 2005. NZOG’s Australian East Coast refineries. decision to develop was based on US$40/barrel and at the date of this report, oil prices are in the Financial: NZOG successfully arranged a $60 region of US$65/barrel. The approved joint venture million (US$37.5 million) finance facility in March construction budget is US$203 million and as it is 2006 covering its entire share of the budgeted Tui recognised that projects of this nature are subject development costs and associated contract deposits. to weather events and other delays which may To provide downside protection against falling oil increase final costs, NZOG will keep this budget figure prices, NZOG has hedged 25% of production reserves. under review. Under those hedges a minimum oil price of US$50/ Annual Report 2006 barrel is guaranteed for 897,000 barrels, while a Construction of subsea equipment and conversion of maximum price has only been locked in for 224,000 the tanker being used for the FPSO has progressed barrels, of US$86/barrel. Of NZOG’s Tui reserves, 2.6 satisfactorily since the development million barrels are presently unhedged and accordingly decision, and substantially in accordance with will achieve market prices.
Oil Tanker Transporting FPSO Production Oil to Markets and Storage Vessel Coastline 70km
120 metres Anchors
Subsea Completions
Development Wells
Pateke-Amukura Reservoir Reservoirs 5km Apart Tui Reservoir
Schematic of Tui Area Development and Production Ocean Patriot semi-submersible rig
New Power Shot To Come
5 New Zealand Oil & Gas Limited
Tui Area Development PMP 38158 Annual Report 2006
Taranui Prospect N
01234 Pateke Oi Prospect KILOMETRES
FPSO
Amokura
Subsurface Flowline
Kahu Prospect Oil Well Kiwi-1 Tui Development Well Dry Hole Well
Prospects Oil Field Tieke Prospect Pike River Coal
MP41453 NZOG stake 61% via PRCL
Milestone Reached in Progress of Major New Coal Mine
First Coal: First production of high quality coking coal 30 June 2006, leaving $115 million to spend. In from the Pike River coal mine on the West Coast of addition, working capital of $29 million is required for the South Island is scheduled for the December 2007 the period until full production is reached in the 2009 quarter. Production is scheduled to rise to 1.1 million year. Offsetting the construction cost increases, tonnes per annum in the year ending December 2009. the long term hard coking coal price is forecast by Pike River coal has unique properties such as low independent expert AME Consulting to be US$74 per ash levels and high fluidity that are highly valued by tonne in 2010, an increase of US$9 per tonne on the international coke and steel companies. price predicted in 2005 by PRCL, but lower than the current market price. Due to strong international demand for its high quality coals, all production from Pike will be exported Construction: The new equity raised during the year internationally by ship. The Pike development allowed mine access and construction works to involves construction of a tunnel to access the coal commence in October 2005. Ten kilometres of access deposit, installation of a coal slurry pipeline and coal road and seven bridges have been constructed. Final preparation plant, and establishment of a new coal design on the coal slurry pipeline was completed and transport chain from mine to export port. the pipeline is currently being milled in Japan. Work on the 2.3 kilometre tunnel by internationally experienced Financial: Two major new equity partners invested contractor, McConnell Dowell commenced in $37 million directly in Pike River Coal Limited (“PRCL”) September 2006 and installation of power supply during the 2006 financial year. Indian coke makers, to the mine and selection of mining equipment is Saurashtra Fuels Private Limited and Gujarat NRE underway. Coke Limited have each made a substantial equity investment and also signed coal purchase contracts Transport: A long term transport contract was for the life of the Pike River mine, equivalent to executed in December 2005 by PRCL and the approximately 550,000 tonnes per annum in total. West Coast Coal Company (“WCCC”); a consortium 6 In addition, NZOG and existing small shareholders comprising Port Taranaki Limited, TNL Group Limited, invested $23 million during the 2006 financial year to Wendell Group and Jebsens International. The New Zealand Oil & Gas Limited fund development. The number of Pike River shares contract is conditional on the parties concluding the acquired by Gujarat for its $20 million investment will financing arrangements. WCCC will make a substantial be matched to the initial public offer share price, on investment in port and shipping facilities under an the same basis as the $40 million invested during the 18 year contract with an annual delivery and export year by NZOG, small shareholders and Saurashtra. capability considerably in excess of the average 1.0 million tonnes expected from the Pike mine. During the year, the PRCL Board approved a revised mine plan, production schedule and construction/ Coal will be trucked from the Pike mine to the
Annual Report 2006 operating cost budget. Higher steel and fuel costs Greymouth port and shipped by two purpose built and a declining NZ dollar caused the construction coastal ships to Port Taranaki. From Port Taranaki, budget to increase to $144 million, which now coal will be shipped in Panamax size vessels carrying includes a $12 million provision for contingencies. loads of up to 65,000 tonnes to export markets in Of that budget, $29 million had been expended by Asia, India, South America and Europe.
Scaffolding at Pike River Coal Mine tunnel entrance Pike River Coal drilling rig
7 New Zealand Oil & Gas Limited Annual Report 2006 Kupe Gas, Oil and LPG
PML38146 NZOG stake 15%
Kupe Gas to Supply 15% of New Zealand’s Current Annual Demand
Development Decision: NZOG gave the green light Construction: Construction management of the to the significant Kupe project in June 2006, thereby project will be through an alliance arrangement completing a “trifecta” of development decisions with the major contractor, Technip, whereby a during a 12 month period. single owner/contractor team will manage all major elements of the development, other than drilling The Kupe development, in a water depth of 32 metres, of the production wells. This alliance approach is involves an offshore unmanned platform, three initial considered internationally to be the optimal way production wells, a 30 kilometre pipeline for transport to achieve the effective and efficient execution of of gas and condensate to shore and a new onshore this type of project as it operates on a risk/reward production station. share basis and aligns interests of the project owner and construction contractor. Construction The unanimous decision by NZOG and its co- works including wellhead fabrication are under venturers to proceed with development of Kupe was way and drilling of the three Kupe production made after a great deal of work on technical and wells is scheduled for mid-2007. ENSCO Oceanics engineering design, assessment, consultation and International has been contracted for the drilling contract negotiation. The work included design of using a newly built jack-up rig, the ENSCO 107. a new onshore production station to process gas from offshore; community consultation to obtain First Production: Kupe production is on schedule necessary resource consents; an upwards revision to commence no later than the first half of 2009, of total project reserves of gas, oil and LPG to 389 delivering around 20 petajoules per annum of sales petajoules equivalent; a contractor alliance project gas – approximately 15% of New Zealand’s current delivery strategy; and renegotiation of a gas supply annual demand. Kupe will also produce a light oil contract. (condensate) and LPG, commencing at 1.9 million barrels per annum and 90,000 tonnes (765,000 barrels The investment decision was based on a construction of oil equivalent) per annum, respectively. NZOG’s 8 budget of $980 million (NZOG share $147 million), share of Kupe proved and probable reserves is 9.9 which includes a substantial allowance for million barrels of oil equivalent. At potential spot New Zealand Oil & Gas Limited contingencies such as weather downtime during prices of US$65/barrel the value of NZOG’s gross offshore installation activities. A key element for liquids sales revenue in the first year of production NZOG was a renegotiated gas supply contract with would be NZ$38million. Genesis Energy, executed in June 2006. Higher gas prices, coupled with higher condensate and LPG The Kupe project involves construction of key long prices and increased reserves have, to a substantial life assets which have characteristics akin to an extent, offset increased project capital costs. infrastructural project given their 15 to 20 year life span.
Annual Report 2006 Financial: NZOG is presently negotiating bank project funding for the bulk of its Kupe investment, which Exploration Upside: The Kupe permit includes several will be outlaid over approximately two and half years. discoveries made in the late 1980’s and early 1990’s Genesis Energy, which has contracted to purchase (Toru-1, Kupe South-4 and Kupe South-5) as well NZOG’s share of proved and probable gas reserves as a series of prospects, which are adjacent to under a long-term contract, will also provide NZOG the central field area (Leith and Denby prospects), with up to $20m funding support. which represent add-on opportunities to the Kupe development. There is also potential for additional gas within the northwest block of the central field area itself, which will be determined once the initial production well into that block is drilled. ENSCO jack-up rig
9 Photo courtesy of ENSCO International Incorporated New Zealand Oil & Gas Limited
Central Field Area of Kupe Development PML 38146
N Kupe 1
NW 05001000 Annual Report 2006 METRES KS 9 NZ map grid GD49 CM173 KS 2 N1
CW-KS3B-CE (Notional first-and second-round W1 KS 3B E1B KS2 KS 8 (Seabed) drilling locations shown here are KS 11 W2 KS 3B the approximate envisaged Top Farewell KS 6 (Top Farewell Fm) Formation intersections) Platform KS 7 KS 1 E1A KS 10 Denby A
KUPE CENTRAL FIELD AREA Denby B E2
Existing wells Leith A First-round drilling Denby C Second-round Drilling (notional locations) Approximate boundary of Petrel-Eclipse Leith B Kupe CFA model Denby D Kupe central field area (CFA) KS 4 EXPLORATION ACTIVITIES
Tieke and Taranui Prospects
PMP 38158 NZOG 12.5% stake Tui Satellite Exploration Prospects Being Drilled The Tieke and Taranui prospects are located approximately 7 kilometres southeast and 15 kilometres northeast of Tui respectively. These Kapuni F-sand reservoir targets are similar to those discovered in the Tui Area oil fields and have potential in the event of discovery, of the order of 5-20 million barrels of oil each. Their proximity to the Tui development would provide an opportunity to quickly bring to production any discoveries made. Tieke-1 and Taranui-1 are scheduled to be drilled after the Tui development wells in the second quarter of 2007.
Further prospects (Oi and Kahu) exhibit similar subtle closures at the Kapuni F-sand level as Tieke and Taranui and provide additional potential upside in the Tui mining permit area.
Hector Prospect Hector South Sub-block
PEP 38483 NZOG stake 18.9% NZOG stake 12.5% Exploring a Potential New Oil Fairway with Substantial Upside The Hector-1 exploration well will test a dip-closed structure at the Kapuni-C level (as mapped on the 3D seismic survey of 2005) that has potential recoverable oil of 50-60 million barrels. In addition to substantial upside at this prospect, a discovery at Hector would trigger further drilling activity in this permit because it would prove a new oil migration fairway within the Taranaki Basin. Several follow-up drilling targets, such as Hector South, have already been identified in the PEP 38483 permit. During the past year a portion of the former PEP 38460 exploration permit containing the Hector South prospect was merged with PEP 38483.
Hector-1 will be drilled using the Ocean Patriot semi-submersible drill rig as part of the offshore Taranaki 10 drilling campaign. The drilling window for Hector-1 will be defined later this year, with the exact timing subject to
New Zealand Oil & Gas Limited finalisation of the Tui development installation schedule, which takes precedence. NZOG has a 18.9% interest in the PEP 38483 permit and holds 12.5% in the Hector South sub-block extension area.
Map of Hector and Hector South Prospects
N Oil Field Tui Oil Fields Gas Field Annual Report 2006 Kiwi-1 Planned Exploration Well
01234 Prospects
KILOMETRES PEP 38483 Extension Area
Dry Hole Well Maui Field
Hochstetter-1
Hector Prospect Kiwa-1 Hector-1
Hector South Pukeko-1 Prospect Maari Field Te Whatu-2 Veritas Viking II shooting transition seismic survey
11 New Zealand Oil & Gas Limited
Felix and Opito-Updip Area Annual Report 2006 PEP 38729 NZOG stake 75% New Seismic Survey Completed The Felix/Opito - Updip area is located at the northern end of the Kapuni Group ancient beach sands system, which was buried in the Eocene era 40 million years ago. These sandstones have formed highly prolific, proven hydrocarbon reservoirs elsewhere in the Taranaki Basin, as evidenced by the offshore Maui, Pohukura and Tui fields.
NZOG is operator of PEP 38729 and completed a refraction seismic survey in early 2006, to further define the potential of the Felix and Opito-Updip structures. Processing and integration of the seismic data together with the well information obtained from the Opito-1 well drilled in 2002 provide strong evidence for prospective trapping structures in the permit.
During August 2006, NZOG completed a coastal “transition zone” seismic survey to tie the existing onshore and offshore seismic data sets together, and to further delineate the Felix and Opito-Updip structures, including the identification of possible drilling locations. The decision on whether to drill an exploration well on the Felix or Opito-Updip structures is expected to be made in the first half of 2007 following evaluation of this new seismic data.
West Kupe
PEP38484 NZOG stake 100%
NZOG relinquished the West Kupe permit (PEP38484) during the year. This decision was made as the company was unable to obtain a time extension for drilling and after factoring in the relatively high risks associated with the Taitapa prospect, and major increases in rig costs. NZOG Taranaki Basin Permits
N NZOG Permit Gas Field Felix Prospect
Oil Fields Opito Updip Prospect
0 8 16 24 32 40 Prospects KILOMETRES
Pohokura Field
New Plymouth
Taranui Prospect Oi Prospect Tui Fields Tieke Prospect
Maui Field
Hector Prospect Denby-Leith Prospect Hector South Prospect Kupe Field Maari Field
12
New Zealand Oil & Gas Limited CORPORATE & ADMINISTRATION Share Placement: A small private placement of 13.3 million shares was made in December 2005 raising $12 million to advance NZOG’s oil and gas projects. The issue amounted to approximately 6% of the company’s issued shares.
Pan Pacific Petroleum Shares: The company subscribed for additional Pan Pacific Petroleum NL shares in a December 2005 rights issue at a cost of $3.1 million, taking its holding in Pan Pacific to 10.1%. The additional investment was made to increase the company’s exposure to the Tui Area oil fields and associated prospects. The market value of the Pan Pacific holding was $9.4 million at 30 June 2006. Annual Report 2006 Bonus Option Issue: NZOG’s free 1:2 bonus option issue to shareholders was completed during December 2005 and resulted in the issue of 107,050,236 options. These options have traded in the range of 8 to 19 cents.
FINANCIAL The company announced a surplus of $2.3 million (after minority interests) for the year ended 30 June 2006 (2005 deficit $2.6 million). The surplus was made after writing off exploration costs of $0.8 million. The result also includes a $2.5 million accounting gain in respect of NZOG’s shareholding in PRCL as a result of PRCL issuing new shares to a third party.
Total revenues for the 2006 year of $7.5 million (2005 $0.6 million) include interest income of $2.3 million (2005 $0.5 million) and a foreign exchange gain of $2.7 million (2005 loss $0.4 million). An unrealised gain of $4.1 million in the value of the company’s investment in Pan Pacific was not accounted for in the 2006 financial result.
During the year ended 30 June 2006, NZOG group invested $43 million in its three development projects: Kupe gas/oil, Tui oil and Pike River coal. At 30 June 2006 NZOG held cash of $41.7 million (including $11.3 million held by PRCL). RESERVES AND RESOURCES STATEMENT
OIL & GAS RESERVES AND RESOURCES
Million* Oil and Condensate Natural Gas LPG Barrels (million barrels) (petajoules) (kilotonnes) of Oil Equivalent
Undeveloped – Proved 2006 2005 2006 2005 2006 2005 and Probable
Kupe 15% 2.2 2.2 38 42 159 94 9.9 Tui 12.5% 3.5 2.5 to 3.75 3.5 Total 13.4 * Million barrels of oil equivalent has been calculated as the total oil equivalent of the oil, condensate, natural gas and LPG fi gures.
COAL RESERVES AND RESOURCES
Estimated Coal Resources
Resources Brunner Seam (Mt)
Measured 11.5 Indicated 27.5 Inferred 19.5 Total 58.5
SOURCE OF SALEABLE COAL FROM THE PIKE RIVER COAL MINE PLAN
Extractable Coal (million tonnes)3 Total ROM Production Reject Dolomite Saleable Coal 13 Reserves 11.0 0.4 0.9 9.7 New Zealand Oil & Gas Limited From Indicated and Inferred Resources 10.6 2 0.7 7.9 Totals 21.6 2.4 1.6 17.6
(2) The group’s interests in undeveloped oil and gas reserves are in NZOG Forecast Annual Production of Oil and Gas the Kupe and Tui fi elds (offshore South Taranaki). Kupe Sales Gas Production (in mmboe) (3) Coal reserves are the estimated quantities of coal which are Kupe Light Oil Condensate Production (in mmbo) expected with reasonable certainty to be recoverable based Tui Oil Production (in mmbo) on fi nancial studies and under existing economic and operating Annual Report 2006 1.40 conditions. Proved reserves have a higher degree of confi dence of economic extraction and have closer drilling or ‘observation 1.20 points’ (0.5km to 1km apart), than probable reserves which are less well defi ned and have less dense drilling or observation 1.00 points (1km to 2km apart).
0.80 (4) Total ROM Production is the total unprocessed production from the mine inclusive of all extracted material including coal, 0.80 dolomite and reject. Reject is the material such as rock which is extracted as part of ROM production and is removed from the 0.40 coal during the coal preparation process and is of no commercial value. Dolomite is a precipitate found in nodules within the ROM 0.20 production seam which is extracted as part of ROM production, is separated from the coal during the coal preparation process 0.00 Millions of Barrels of Oil Equivalent (mmboe) Oil Equivalent Barrels of Millions of 2007 2008 2009 2010 2011 2012 2013 and is of commercial value as a fertiliser. Saleable Coal is the fi nal Year saleable coal production of Pike River that is transported to Port
*Source: Tui Oil production forcast from Tui Operator (AWE). NZOG has Taranaki for export. calculated the approximate barrels of oil equivalent for Kupe gas forecasts from the Kupe Operator (Origin Energy). (5) Oil, gas and coal reserves are reported in accordance with Section 10.11 and Section 10.12 respectively, of the New Zealand Stock Exchange listing rules. Oil and gas reserves accurately refl ect information supplied by the respective Joint Venture Notes Operators. Pike River’s coal resources are estimated by Golder (1) Proved oil and gas reserves are the estimated quantities of oil Associates (NZ) Limited. The Mine Plan for extraction of coal from and gas which geological and engineering data demonstrate which the sources of saleable coal was derived, was prepared by with reasonable certainty to be recoverable in future years Minarco Asia Pacifi c Pty Limited. from known reservoirs under existing economic and operating (6) All reserves are unaudited. conditions. Probable reserves are defi ned as those which have a better than 50% chance of being technically and economically producible. DIRECTORS
Mr R A Radford Executive Chairman and Chief Executive Tony Radford, CA (NZ) has spent most of his career in petroleum and mining companies, including senior fi nancial positions in the steel, minerals and oil and gas industries. Tony is a founding director of New Zealand Oil & Gas.
14 Prof R F Meyer Mr P G Foley Mr S J Rawson Mr D R Scoffham Deputy Chairman New Zealand Oil & Gas Limited
Ray Meyer obtained his Originally from Auckland, Steve Rawson is originally David Scoffham joined the BE from the University of Paul Foley is a senior from Wellington and has board of NZOG in 2003. New Zealand (Canterbury) corporate/commercial an MSc in geophysics David took up residence and his PhD from the lawyer based in Wellington, from Auckland University. in New Zealand following University of Manchester. where he is a partner His career started in over 30 years international A Distinguished Fellow in Minter Ellison Rudd petroleum geophysics, experience in the oil of the Institution of Watts. Paul acts for listed later followed by industry. This included Professional Engineers companies operating in managerial positions with experience in Egypt, Gabon,
Annual Report 2006 New Zealand, his career the petroleum exploration Fletcher Energy in trading, Oman and Venezuela with includes senior positions and minerals fields. He logistics and supply. Steve Shell, and in exploration in Canada and Chair of became a director of is General Manager New management with UK Mechanical Engineering NZOG in 2000. Business Development independent Enterprise and Dean of Engineering at for Mighty River Power Oil PLC. He played a major the University of Auckland. Limited. He joined the role in several important He was a director of ECNZ, board of NZOG in 2000. oilfield discoveries in NW Auckland UniServices Europe, which resulted in Ltd, Transpower and the major expansion of Watercare Services Enterprise Oil. David is a Ltd and is currently a graduate of Christ Church director of Wellington Oxford (MA Physics) and Drive Technologies Ltd. Ray Imperial College, London joined the NZOG board in (MSc Geophysics). 2000 as Deputy Chairman. He also heads the board’s audit and remuneration committees. MANAGEMENT TEAM
Dr Jonathan Salo Helen Mackay Gordon Ward Andrew Stewart Dr Stefan Kleffmann 15 Senior Manager Geology General Counsel General Manager Manager Accounting Manager Geophysics and Compliance New Zealand Oil & Gas Limited
Jonathan Salo joined Helen Mackay joined Gordon Ward has 19 Andrew Stewart joined Stefan Kleffmann NZOG in January 2006 NZOG in July 2006 as years experience in NZOG in April 2004. joined NZOG in as Senior Manager, General Counsel. Helen the resource sector Andrew has 20 years December 2004 as Geology. Dr Salo has was previously in legal with NZOG. He was business experience Manager, Geophysics. 20 years petroleum and commercial roles appointed NZOG’s with various fi nancial Dr Kleffmann has industry experience with Vector, NGC and General Manager in institutions in New 14 years experience in the USA, Africa, ECNZ and has practised 2004. Gordon has had Zealand, UK, Ireland relevant to the Middle East, Asia, as an in-house lawyer particular responsibility and Australia as well as petroleum industry and Annual Report 2006 and Australia. He is in New Zealand and for the Pike River Coal large multi-nationals completed his PhD in credited by professional England. She has an LLB project. Gordon holds including the former Geophysics at Victoria organisations with the and BCA from Victoria a Bachelor of Business New Zealand Dairy University of Wellington. discovery of fi ve billion University of Wellington. Studies from Massey Board and Fonterra, Immediately prior to barrels of oil equivalent. Helen is also Vice- University (Palmerston Coca~Cola and more joining NZOG, he worked Jonathan has numerous President (Wellington) North) and obtained his recently Rolls-Royce. with an international professional and of the Corporate Chartered Accountant Andrew holds MBA, consultancy on a industry awards Lawyers Association of qualifi cation whilst a BCA and CA (NZ) range of exploration (including exploration New Zealand. senior auditor with qualifi cations. and production oil and awards), and a PhD Coopers & Lybrand gas projects within in Petroleum Geology (now Price Waterhouse Australasia. from the University of Coopers). He was Adelaide. appointed to the Pike River Board in July 2006. FINANCIAL STATEMENTS
16 New Zealand Oil & Gas Limited Annual Report 2006
- - - 89 948 1,876 2005 2005 $000 $000 22,281 22,281 22,281 42,738 66,984 1 - - - 7,748 2006 2006 $000 $000 4,620 4,620 4,620 11,833 83,438 66,984 89 (11) (11) 584 (103) 2005 2005 $000 $000 1,099 (2,463) (2,566) (2,566) (2,555) (2,555) 42,738 90,916 49,556 nancial statements. nancial 1 107 107 (112) Consolidated Company Parent Consolidated Company Parent 2006 2006 7,538 7,538 $000 $000 2,521 2,409 2,409 2,302 2,302 11,833 90,916 33,854 139,013 3 4 17 2(i) 4(i) 2(ii) Note Note cit) before taxation cit) before the year for cit) cit) comprises: cit) cit) for the year cit) for t/(expense) Equity at end of year at end of Equity Total revenue Total year at beginning of Equity Taxation benefi Taxation Net surplus/(defi interest Parent Operating surplus/(defi Movement in minority interest during the year Movement in minority interest
Total recognized revenueNet surplus/(defi and expenses: Contributions from owners: in subsidiaryShares issued minority interest company to Shares issued 2005 share options exercised Minority interest Net surplus/(defi STATEMENT OF FINANCIAL PERFORMANCE OF FINANCIAL STATEMENT 2006 JUNE THE YEAR ENDED 30 FOR The notes on pages 22 to 34 form part of and are to be read in conjunction with these fi and are to part of 34 form on pages 22 to The notes STATEMENT OF MOVEMENTS IN EQUITY OF MOVEMENTS STATEMENT JUNE 2006 THE YEAR ENDED 30 FOR
New Zealand Oil & Gas Limited Annual Report 2006 18 New Zealand Oil & Gas Limited Annual Report 2006 19 ------103 541 794 198 897 1,551 2005 $000 2,603 47,341 47,341 65,402 48,269 48,238 66,984 66,984 66,984 49,820 62,060 115,222 ------251 215 976 158 669 2006 $000 3,661 1,345 1,503 1,503 2,280 11,515 84,941 73,426 10,846 83,438 83,438 83,438 66,043 ------55 116 277 103 1,739 4,377 2005 $000 1,463 2,891 2,994 2,994 2,603 51,518 37,994 93,910 90,916 90,916 42,392 49,663 86,539 nancial statements. nancial - - - 116 221 122 521 643 Consolidated Company Parent 1,611 2006 $000 1,543 3,007 9,788 4,583 2,622 17,747 2,280 41,712 27,756 87,510 21,264 16,982 10,009 64,635 38,335 102,134 139,013 139,013 166,769 100,678 7 3 4 6 6 6 6 9 9 9 5 8 14 12 13 15 15 15 15 10 Note Current Liabilities Creditors Non-Current Liabilities Borrowings Advances from wholly owned subsidiary parent companies to from Advances EQUITY SHAREHOLDERS’ TOTAL Deferred expenses Deferred Inventories Assets Current Total expenses Deferred companies resource in listed Investments Fixed assets Other Assets Non-Current Total Provisions tax Deferred ASSETS NET EQUITY the Company Shareholders of to Attributable the Group Minority Shareholders of to Attributable Receivables Non-Current Assets Prepayments company Investment in associate Provisions Total Non-Current Liabilities Total Liabilities Total Total Assets Total Petroleum and coal interests Petroleum Current Assets cash deposits securities and Short term Investment in subsidiaries Current Liabilities Total Advances to wholly owned subsidiary companies from parent wholly owned subsidiary to companies from Advances STATEMENT OF FINANCIAL POSITION OF FINANCIAL STATEMENT 2006 JUNE 30 AT AS R F Meyer R A Radford 2006 A August R 29 Meyer 2006 F Director August R Director 29 The notes on pages 22 to 34 form part of and are to be read in conjunction with these fi and are to part of 34 form on pages 22 to The notes Directors the Board of of On behalf ------90 496 496 (248) 1,148 2005 $000 5,792 5,687 4,539 3,958 (1,481) (1,729) (1,559) 47,312 (2,055) (2,055) 41,430 29,353 (17,959) (17,959) ------(1) 91 (89) 323 805 7,657 1,775 6,178 2006 $000 4,327 1,485 1,325 5,367 3,989 (7,840) (3,120) (3,329) (3,330) 13,158 13,158 11,833 (54,827) (61,005) (49,956) ------90 113 537 537 150 996 996 (261) 2005 $000 1,093 (1,901) (8,517) (9,513) (2,438) (9,252) (2,551) 41,430 42,763 42,763 nancial statements. nancial ------(28) 323 323 (351) Consolidated Company Parent 2006 $000 1,325 2,309 2,309 (2,734) (3,120) (5,910) (5,910) (5,015) (5,043) (2,558) 11,833 16,970 47,110 41,200 16,982 (43,415) (49,121) (49,444) Note
xed assets xed Cash Flows From Investing Activities From Investing Flows Cash Purchase of shares in listed resource company shares in listed Purchase of Cash Flows From Operating Activities From Operating Flows Cash Other income Other Activities From Financing Flows Net Cash Cash was received from: received Interest Write back of investment back of Write Issue of shares of Issue Loans repaid by related parties Loans repaid by related Net Cash Flows From Investing Activities From Investing Flows Net Cash borrowings of Repayment Cash was paid for: Cash was received from: shares in partly owned subsidiary of Issue Cash was paid for: and coal expenditures Petroleum Cash was received from: company investment in associate Sale of Cash was paid for: Production expenses Net Cash Flows From Operating Activities From Operating Flows Net Cash other entities and wholly owned subsidiaries Loan to Cash Flows From Financing Activities From Financing Flows Cash Proceeds from repayments of loans of repayments Proceeds from Issue of shares from exercise of 2005 options exercise of shares from of Issue Proceeds from borrowings Proceeds from Dividends Interest and employees suppliers to Other payments investment in subsidiary Sale of other fi Purchase of resource company shares in unlisted Purchase of Security deposit STATEMENT OF CASH FLOWS FLOWS OF CASH STATEMENT 2006 JUNE THE YEAR ENDED 30 FOR The notes on pages 22 to 34 form part of and are to be read in conjunction with these fi and are to part of 34 form on pages 22 to The notes
New Zealand Oil & Gas Limited Annual Report 2006 20 New Zealand Oil & Gas Limited Annual Report 2006 21 ------50 58 (81) (58) 470 2005 2005 $000 $000 (1,031) (1,559) 31,752 16,459 22,281 48,269 48,269 (23,190) ------72 73 81 (81) 240 (759) 2006 2006 $000 $000 4,327 4,620 10,846 10,846 48,269 (37,342) - - - 72 66 38 (12) 211 377 134 931 152 (377) (284) 2005 2005 $000 $000 (1,031) (1,901) 17,695 (2,555) 32,345 49,663 49,663 nancial statements. nancial - - - - - 107 107 797 122 312 467 Consolidated Company Parent Consolidated Company Parent 2006 2006 $000 $000 2,704 2,302 (1,722) (2,734) (2,704) 41,712 41,712 (2,522) 49,663 (10,655) 5 Note (continued) cit):
owcategories: xed asset xed taxation cit) after operating activities from ows Provision against advances to associate companies associate to Provision against advances Net cash fl Net cash (Decrease)/increase in creditors Net increase/(decrease) in cash Net increase/(decrease) Net surplus/(defi (Decrease)/increase in provisions Loss / (gain) on disposal of fi / (gain) on disposal of Loss Cash at beginning of year at beginning of Cash YEAR END OF AT CASH Made up as follows: cash deposits securities and Short term Exchange (gains)/losses Exchange Changes in assets and in debtors liabilities:(Increase)/decrease Items included in other cash fl Adjust for non-cash items in subsidiary provision against investment back of Write in operating surplus/(defi Effect of exchange rate changes on cash changes exchange rate of Effect Movement in minority interest Gain in reduction of interest in subsidiary interest Gain in reduction of Depreciation tax Deferred income tax Provision for petroleum and coal development, exploration, of Write-off expenditure Provision / (release) against investment in associate Provision / (release) against investment in STATEMENT OF CASH FLOWS FLOWS OF CASH STATEMENT RECONCILIATION OF NET SURPLUS/(DEFICIT) FOR THE YEAR YEAR THE FOR SURPLUS/(DEFICIT) OF NET RECONCILIATION ACTIVITIES FROM OPERATING FLOWS CASH WITH NET The notes on pages 22 to 34 form part of and are to be read in conjunction with these fi and are to part of 34 form on pages 22 to The notes cant nancing and tax ed as production areas expenditure) xed asset nancial performance under performance nancial ned by the group as a licence or permit successful development and exploitation of the area, or the area, and exploitation of development successful sale; or by its alternatively, a reasonable not yet reached a stage which permits or the existence of evaluation and/or assessment economically recoverable reservesotherwise or of active and signifi and as applicable, resources, these areas are or in relation to, operations in, continuing. activities in the area have evaluation exploration and/or be recouped through to are expected such costs cant restoration and rehabilitation expenditure to be and rehabilitation expenditure to cant restoration interest which are being developed for production. production. for which are being developed interest are reclassifi until they interest of petroleum or coal production. commencement of following are tenure of which rights for interest incurred in areas of current and: (i) (ii) development costs (excluding fi costs development in which petroleum interest areas of incurred in relation to on Expenditure or coal production has commenced. the production is amortised using production interests output method resulting in an amortisation charge recoverable economically the depletion of proportional to Where such as applicable. proven reserves or resources, recoverable under be fully are considered not to costs cover the an amount is provided to existing conditions, shortfall. les, estimates of future product sales prices, operating product sales prices, future of estimates les, losses and legislative changes. and legislative changes. losses Production, Development, Exploration and Evaluation and Evaluation Exploration Development, Production, Expenditure interest’ ‘areas of and coal incurred on petroleum Expenditure An method. efforts using the successful for is accounted is defi interest area of with expenditure (together and evaluation Exploration area. these expenditures), relative to advances certain inter-group fi of in the statement off is written in the period accounting method of efforts the successful interest that an area of that exploration work demonstrates economically prospective for is no longer or any part thereof, or when the as applicable, recoverable reserves or resources, is made. interest an area of abandon decision to or any interest in an area of forward Where expenditure carried that area of of valuation exceeds the directors’ part thereof, valuation. the directors’ down to are written the costs interest especially projects interest, areas of of valuations Directors’ upon a number of are dependent stage, at a pre-development valuation at the time of that are uncertain or tentative factors include the Such factors change. and which may be subject to production reserves, of levels secure sales contracts, ability to profi fi of availability capital expenditures, costs, (b) Development interests interests (b) Development incurred on areas of comprise costs interests Development areas development No amortisation is provided in respect of (c) interests Exploration and Evaluation comprise costs interests and evaluation Exploration is contingent upon the interest areas of of value The ultimate with into entered exploration and agreements further of results under the other parties and also upon meeting commitments and granted permits of terms joint venture agreements. are shown as prospecting and mining permit rights Sales of in the period earned. revenue and Rehabilitation Expenditure Restoration Signifi production from of the cessation incurred subsequent to (a) Production interests interests (a) Production and evaluation comprise exploration, interests Production nancial ts are expected expected are ts cant accounting policies nancial statements incorporate the incorporate nancial statements using the purchase nancial statements transactions have been cant intercompany Accounting Policies Accounting able assets is ascertained. The difference between The difference is ascertained. assets able nancial statements of subsidiaries are included in of nancial statements have been prepared in accordance with statements nancial nancial statements of the company together with the the company together of nancial statements subsidiary its companies. of nancial statements identifi investment is brought to and the cost of value the fair account either as a premium (goodwill) or discount on acquisition. in which benefi periods over the appropriate The periods but not exceeding twenty years. be realised, to be amortised are subject to are to over which the amounts annual review. the non-monetary of assets of value against the fair fi of the statement the subsidiary to is taken as a gain. performance results are included only from the date of acquisition, while while acquisition, of the date are included only from results their results during the period, subsidiaries disposed of for disposal. of the date are included to companies are shown at cost in associate and investments since acquisition. movement in net assets plus the share of a permanent the directors, in the opinion of Where, in associate investments has occurred, diminution in value their recoverable amount. down to companies are written in shares held directly or indirectly interest the company’s reduce is to The effect own capital (‘treasuryin its capital’). capital and reserves available and externally the company’s the investment in the company. eliminate to method. All signifi method. on consolidation. eliminated fi fi fi the consolidated nancial statements are exclusive of GST. are exclusive of statements nancial (b) Balance on Acquisition on (b) Balance net of value the fair a subsidiary, On the acquisition of charges against income Goodwill is amortised by systematic elimination Any discount on acquisition remaining after (ii) Associate Companies (ii) Associate companies are equity accounted associate material, Where Capital (iii) Treasury remove The treasury accounting method is used to stock their subsidiaries are acquired during the period, Where (a) Principles of Consolidation of (a) Principles (i) Subsidiaries fi consolidated The fi The generally accepted accounting practice and in compliance with generally accepted 1993. Act Reporting 1993 and the Financial Act the Companies 1993. Act Reporting under the Financial The company is an issuer Measurement Base adjusted cost is historical adopted The measurement base in the shown All amounts certain assets. of by the revaluation fi Changes in All policies. changes in accounting There have been no material with those used policies have been applied on bases consistent period. in the previous are the signifi Summarised hereafter adopted. Consolidation Basis of Reporting Entity (‘the Oil & Gas Limited entity is New Zealand The reporting subsidiary and its (‘the group’). companies ‘NZOG’) or company’ Base Statutory The fi NOTES TO THE FINANCIAL STATEMENTS FINANCIAL THE TO NOTES 1. POLICIES ACCOUNTING OF STATEMENT
New Zealand Oil & Gas Limited Annual Report 2006 22 New Zealand Oil & Gas Limited Annual Report 2006 23 cit) is virtually t ows arising from the from ows arising nancing activities nancing timing t relating to and xed assets nance which is included in nancial position. The future tax The future nancial position. nancial instruments other than off other than off nancial instruments represents cash received from cash received from represents nancial statements, investments in investments nancial statements, represents cash fl represents represents cash fl represents debt fi ows from nancial instruments as part of its its as part of nancial instruments ows ows. ows ows the benefi nancial position unless nancial performance as operating items. as operating items. nancial performance provide more in order to ows are netted in oil prices. uctuation includes cash on hand and at bank, short term short term includes cash on hand and at bank, ed to facilitate comparison. facilitate ed to nancial instruments are recognised in the statement of of are recognised in the statement nancial instruments t or provision for deferred tax is stated at the income tax at the income tax is stated deferred t or provision for Cash any overdraft. less bank bills and government stock deposits, fl Operating cash employees including suppliers and and paid to customers production operating expenses and royalties. fl cash Investing acquisition and divestment of investment and productive acquisition and divestment of comprise fi Productive assets assets. petroleum and coal expenditure. accumulated fl Financing cash of the capital structure cash transactions affecting the group and cash fl on debt fi excluding interest operating cash fl
nancial position at cost. nancial performance. All fi nancial performance. differences and tax losses is not carried forward as an asset in as an asset forward is not carried and tax losses differences fi of the statement being realised. certain of Figures Comparative year are the previous for the amounts Where necessary, reclassifi Certain cash fl Certain disclosure. meaningful Taxation Income tax is recognised on the operating surplus/(defi between permanent differences for adjusted taxation before using tax is calculated Deferred and accounting income. taxable This method the comprehensive basis under the liability method. all timing differences of involves recognising the tax effect tax asset income as a deferred between accounting and taxable fi of or liability in the statement benefi at balance date. prevailing rates income tax benefi the net future However, Investments in Wholly Owned Subsidiaries in Wholly Owned Investments fi company’s In the parent of the statement are recognised in balance sheet instruments fi Flows Cash of Statement (a) (b) (c) wholly owned subsidiaries are recorded at cost or directors at cost or directors subsidiaries are recorded wholly owned there is the directors, in the opinion of where, except valuation, are written in which case they in value, a permanent diminution recoverable amount. their estimated down to Where wholly owned subsidiary sold petroleum companies have the and have advanced rights or coal prospecting permit of the directors the parent company, net sale proceeds to the investment in those revalued the parent company have not exceeding their underlying net an amount companies to assets. Currencies Foreign at the New translated currencies are in foreign Transactions the transaction. of at the date exchange ruling of rate Zealand including monetary and liabilities, assets foreign balance date At at are translated operations, foreign integrated those of are included in the and exchange variations the closing rate, fi of statement Financial Instruments fi The group is a party to include Financial instruments day operating activities. day to in listed investments securities and cash deposits, short term and borrowings, creditors receivables, resource companies, liabilities as well as and non current certain non current assets in order to into entered balance sheet instruments certain off manage the fl in relation and expenses (including gains and losses) Revenues all fi to fi (d) nancial nancial statements statements nancial at valued nished goods are xed assets over their estimated over their estimated xed assets ttings 5-8 years nancial performance. nancial ce furniture and fi ce furniture ected in the current year’s accumulated production, production, accumulated in the current year’s ected nancial performance using the outputs method. the outputs using nancial performance production areas of interest is provided for based on best based on best is provided for interest areas of production settle the present expenditure required to the of estimates of in the statement and expensed balance date obligation at fi Joint Ventures in the interest its group consolidates the Where material unincorporated of and expenses revenues joint liabilities, assets, headings in the fi ventures under appropriate using the proportionate method of consolidation. method of using the proportionate Sales Revenue or Coal Petroleum invoiced of share sales represent the group’s or coal Petroleum oil and gas or coal products. delivery of sales following Unearned Income where sales contracts or pay’ ‘take under received Payments The as unearned income. are treated gas is not yet delivered, fi of are recognised as income in the statement payments performance once the gas is delivered. performance and Operating Expenses Administration expenses, The group incurs certain administration and operating operations. which are recovered in the normal course of the group to relate those expenses which of proportion A are refl and exploration expenditure. development certain amounts accounting policy, the group’s of In terms each off expenditure may be written the accumulated of those individual identify to it is not possible As a result, year. which have been charged administration and operating expenses, fi of the statement to Receivables Trade net realisable at their estimated are stated receivables Trade value. Inventories Field operation consumables and fi the lower of cost and net realisable value. the lower of Land directors, except where in the opinion of at cost, Land is stated in which case it is there is a permanent diminution in value, amount. recoverable estimated recorded as its Assets Fixed for an allowance at cost less are stated Fixed assets depreciation. on a straight line basis Depreciation has been provided for fi charge the cost of so as to economic lives assessed as follows: economic lives assessed Buildings Plant and equipment Offi vehicles and trucks Motor equipment & computer Technical pipelines are depreciated and associated Production facilities over revenue with the recognition of on a basis consistent is more or straight line basis whichever their economic life 2-5 5 such equipment is of the economic life Thus, appropriate. 4-18 years and production and remaining reserves, 18 dependent on future years are costs Where such project. to project from varies therefore years years recoverable under existing conditions, be fully not considered to the shortfall. cover an amount is provided to Securities in ShortTerm Investments or at securities are recorded at cost, in short term Investments Premiums premium or discount amortisation. for cost adjusted of the date are capitalised and amortised from and discounts maturity. purchase to Companies Resource in Listed Investments resource companies are recorded at the in listed Investments cost and net realisable value. lower of ------12 47 50 ting 377
140 498 948 450 alized alized ional alue 2005 2005 $000 $000 ed 2,262 (1,031) (23,190) price ed during gnised in 1 - - - - - 61 72 91 48 80 210 805 2006 2006 7,748 $000 $000 1,485 5,367 2,656 1 - - - - 47 18 46 66 377 152 160 538 584 2005 2005 $000 $000 2,227 1,030 (1,031) - - - - - 3 61 73 39 797 106 Consolidated Company Parent Consolidated Company Parent 265 2006 2006 $000 $000 2,707 7,538 3,673 2,522 2,309 3 (iv) (iii) Note Note nancial position at 30 June 2006 is based on a 39% (2005: 27.9%) 39% (2005: 27.9%) June 2006 is based on a nancial position at 30 CONTINUED cit) before taxation has been determined after: been determined has taxation cit) before Charging/(crediting) against expenses fees Directors’ Fees paid to parent company auditors for other services for parent company auditors paid to Fees Interest received Interest Fees paid to parent company auditors parent company auditors paid to Fees Total revenue Total Petroleum and coal exploration expenditure written off or off written and coal exploration expenditure Petroleum valuation down to associate to Provision against advances Dividends investment back of Write exchange gains) Other (including realised Operating expenditure Provision / (release) against investment in associate / (back) provision against investment in subsidiary off Write Exchange losses Exchange Interest paid Interest Fixed asset depreciation Fixed asset Gain on reduction of interest in subsidiary interest Gain on reduction of nancial statements. nancial shares. on the consolidat There is no effect provided against. previously $23,190,000 that was a gain on the investment in Curdridge of fi the parent company re wholly owned subsidiary in 2005, Limited company Curdridge Investments the liquidation of of As a result underwriting of an issue $805,000 (2005: $88,000) for Limited Coal River Pike During the year the parent company received from (i) Revenue (ii)
(iv) (iii) The amount attributable to minority interest in the statement of fi of in the statement minority interest The amount attributable to minority interest in Pike River Coal Limited (‘PRCL’) and a 40% (2005: 40%) minority interest in Pafule Pty Limited (‘Pafule’). Pty Limited in Pafule interest and a 40% (2005: 40%) minority (‘PRCL’) Limited River Coal in Pike minority interest reco PRCL was into new investors introduction of $2.5 million arising from The gain on reduction in investment in subsidiary of the 6 months ended 31 December 2005. Whilst there have been further investors in PRCL, the amount of gain is dependent on the v the amount of in PRCL, investors Whilst there have been further the 6 months ended 31 December 2005. attributed to PRCL in the planned Initial Public Offer. Accordingly, no further gain on investments made in PRCL subsequent to made in PRCL subsequent to gain on investments no further Accordingly, PRCL in the planned Initial Public Offer. to attributed 31 December 2005 has been recognised. Limited Saurashtra Fuels Private (NZOG), Oil & Gas Limited between New Zealand Agreement Subscription an Equity Pursuant to and underwri brokerage million net of PRCL received $14.9 “Saurashtra ESA”), 2005 (the 20 September (Saurashtra) and PRCL dated costs on the issue of shares. of on the issue costs June 2006 (the 12 (Gujarat) and PRCL dated Limited Gujarat NRE Coke between NZOG, Agreement Subscription an Equity Pursuant to were receiv These funds shares. of on an issue commitment fees million net of receive $19.4 PRCL is entitled to “Gujarat ESA”), August 2006. no addit for and Gujarat ESA, the Saurashtra ESA shareholders who acquired PRCL shares pursuant to to issue PRCL is required to having an issue additional shares as would result in all the shares acquired under the agreements such number of consideration, the IPO price. equal to Operating surplus/(defi 3. MINORITY INTEREST MINORITY 3. NOTES TO THE FINANCIAL STATEMENTS STATEMENTS FINANCIAL THE TO NOTES 2. TAXATION BEFORE SURPLUS/(DEFICIT) AND OPERATING REVENUE TOTAL
New Zealand Oil & Gas Limited Annual Report 2006 24 New Zealand Oil & Gas Limited Annual Report 2006 25 - n
6,465 2005 $000 22,280 66,984 12,160 (61,802) 36,109 (39,522) 48,269 scribe in the -- -- 150 90 3 ne vote. 71,258 42,738 (5,865) (2,794) Number 199,507 100,041 133,964 60,007 205,372 102,835 2006 $000 of Shares of 10,843 10,846 - 4,620 6,465 83,438 (34,902) (39,522) 2005 $000 21 36,110 13,553 49,663 1,535 15 (5,865) (2,794) 13,334 11,821 107,239 - 214,378 111,878 Number 218,708 114,657 205,372 102,835 of Shares of 8 - Consolidated Company Parent 2006 $000 2,891 41,712 41,704 (2,555) 86,539 (16,393) (13,838) -- -- 150 90 71,258 42,738 (5,865) (2,794) Number 199,507 100,041 133,964 60,007 205,372 102,835 of Shares of - Consolidated Company Parent 2,891 2,302 (14,091) (16,393) 100,678 21 2006 2006 2005 2005 2006 2006 2005 2005 1,535 15 (5,865) (2,794) 13,334 11,821 107,239 - 214,378 111,878 Number 218,708 114,657 205,372 102,835 of Shares of (i) (i) (ii) (iii) Note 000s $000 000s $000 000s $000 000s $000 cit) cit) cit) for the year cit) for for one share in the capital of the Company at an exercise price of NZ$1.50 exercisable anytime up to 30 June 2008. 1,210 “2008 1,210 June 2008. NZ$1.50 exercisable anytime 30 up to at an exercise price of the Company one share in the capital of for the amount paid up. to in proportion a vote paid shares are entitled to Partly ESOP. options” and 750 “2005 options” were exercised in the year ending 30 June 2006. The Company issued 150,000 options as part of a 150,000 options as part of issued The Company June 2006. were exercised in the year ending 30 “2005 options” and 750 options” and exercisable at $1.26. which are unlisted incentive programme, Total shareholders’ equity shareholders’ Total Cash on deposit Cash Retained reserves/(defi Retained carried forward carried forward Bank Options on issue Options exercised Asset revaluation reserve revaluation Asset Opening and closing balance Partly paid shares issued Partly Reported paid in share Capital – in share capital Paid opening balance Treasury share elimination Treasury in share capital-closing Paid balance Reserves reserves/(defi Retained reserve Share revaluation Opening and closing balance brought forward Net surplus/(defi Shares issued Included in cash on deposit are US dollar balances of US$16,345,000; NZ$26,700,000 (2005: US$5,832,000; NZ$8,262,000). Included in cash on deposit are US dollar balances of (iii) o is entitled to paid share issued fully Each paid. are fully all shares issued the partly paid shares issued, Apart from Notes: (i) sub option entitles the holder to Each (“2008 options”). 107,088,759 issued June 2006 the Company During the year ending 30 (ii) participants to NZ$0.01 each, paid to 1,535,000 partly paid shares, issued June 2006 the Company During the year ending 30 5. 5. DEPOSITS AND CASH SECURITIES TERM SHORT 4. SHAREHOLDERS’ EQUITY SHAREHOLDERS’ 4. ------541 578 208 2005 2005 $000 $000 2005 $000 1,551 1,343 parent - - - - - 251 251 669 669 2006 2006 $000 $000 2006 $000 3,661 5,578 - - - - - 116 396 2005 2005 $000 $000 2,117 2005 $000 1,463 1,739 1,343 - 116 Consolidated Company Parent Consolidated Company Parent Consolidated Company Parent 2006 2006 $000 $000 $000 1,611 4,618 4,583 1,543 9,364 1,864 3,007 19,400 22,807 (i) (ii) (iii) Note 2006 CONTINUED nancing projects. nancing c Petroleum NL at book value NL at book value c Petroleum
company auditors for services related to the IPO. services to related for company auditors Non-current Pacifi Shares and options in Pan Field operation consumables Current receivables Trade Market value based on listed share and option prices based on listed value Market Deferred expenses Deferred Option conversion receivable expenses Deferred Minority interest equity receivable Minority interest Non-current Prepayments Notes: (i) subsidiary Limited. River Coal company Pike from receivable includes $354,000 trade receivables Company Parent (ii) $1,343,000. to amounted that date, after June 2005 and received 30 options mailed prior to 2005 Monies for (iii) the and includes $45,000 paid to Limited River Coal Pike for IPO costs to expenses relate deferred The current portion of (iv) fi for expenses includes certain costs Deferred 8. 8. IN RESOURCE COMPANIES INVESTMENTS 7. INVENTORIES 7. NOTES TO THE FINANCIAL STATEMENTS STATEMENTS FINANCIAL THE TO NOTES 6. AND PREPAYMENTS RECEIVABLES EXPENSES, DEFERRED
New Zealand Oil & Gas Limited Annual Report 2006 26 New Zealand Oil & Gas Limited Annual Report 2006 27 ------% (50) 198 248 2005 $000 2005 $000 2005 2,603 spects) spects) 72,661 62,060 (10,601) been (2005: permit was permit was ------% 976 215 336 (121) 2006 $000 2006 $000 2006 2,280 76,644 66,043 (10,601) ------% (50) 277 327 12.5 18.9 15.0 75.0 28.6 50.0 2005 $000 2005 $000 2005 2,603 Percentage Interest Percentage ------% Consolidated Company Parent 521 681 Consolidated Company Parent Consolidated Company Parent 12.5 12.5 18.9 15.0 75.0 (160) 2006 $000 2006 $000 2006 2,280 100.0 (i) Note cant unincorporated and develop explore, joint ventures established to xed assets xed xed assets include land of $65,000 (2005:$65,000). include land of xed assets xed assets xed nancial statements of all of nancial statements joint ventures are unaudited. contained in the former PEP 38460. A condition of approval was the relinquishment of the remainder of the former PEP 38460 the former the remainder of the relinquishment of was approval condition of A PEP 38460. contained in the former PEP 38483. appended to South Sub Block (“HSSB”) which was the Hector exploration acreage apart from applied as the amounts involved are not material. applied as the amounts relinquished on 14 July 2006. relinquished on 14 PMP 38158PEP 38460 TuiPEP 38483 PatekeAmokura, Tui, – Maui West PEP 38483 Hector PEP 38484 South Sub Block Hector – HSSB PEP 38718Taitapa - Kupe West PEP 38729 Tuihu (i) Felix (i) (ii) (i) (iii) Joint Venture Licence Prospect name Note PML 38146 Kupe Cost Other fi Book value of fi of Book value Intercompany loans and advances loans Intercompany Accumulated depreciation Accumulated Investment in subsidiaries Investment In Subsidiary Companies In Subsidiary Investment Provision for diminution Provision for Nominees Limited - NZOG associate Investment in unlisted Note: fi (i) Other NZOG group interests held at 30 June 2006, in signifi June 2006, held at 30 group interests NZOG produce petroleum: The fi Notes: (i) pro Oil Fields (and satellite Tui 2005 over the on 31 October Development Economic by the Ministry granted of PMP 38158 was (ii) the other of the withdrawal The increased during the year due to The PEP 38484 permit interest joint venture participant. Note: (i) companies has not associate accounting for Equity 22. subsidiary companies is provided in note and associate schedule of A (iii) on 30 November 2005. relinquished was Permit The contribution made by by $797,480 by $Nil (2005: $Nil) and expenses increase revenues to was group results joint ventures to expense). $917,206 11. JOINT VENTURES JOINT 11. 10. FIXED ASSETS 10. 9. 9. COMPANIES ASSOCIATE AND IN SUBSIDARY INVESTMENTS ------rs 2005 2005 $000 $000 e that ------2006 2006 $000 $000 75 nancial statements is supported is supported nancial statements 116 567 567 2005 2005 $000 $000 1,150 1,395 2,384 2,684 3,554 (1,086) 24,110 24,677 37,994 23,091 29,308 172 116 573 Consolidated Company Parent Consolidated Company Parent (841) 2006 2006 $000 $000 2,574 3,213 3,213 6,446 87,510 47,230 37,994 44,879 15,260 28,078 44,528 (i) (i) (ii) (iii) CONTINUED Kupe PML38146 Tui PMP38158 Pike River MP41453 nancial studies and pricing of equity issued by PRCL to third party investors during the year ending 30 June 2006. The directo June 2006. during the year ending 30 third party investors by PRCL to equity issued nancial studies and pricing of accumulated petroleum exploration, evaluation and development expenditure is recoverable through these projects proceeding to proceeding to expenditure is recoverable through these projects development and evaluation petroleum exploration, accumulated development. Tui project (PMP38158). The actual amount recoverable is dependent upon a number of factors which are uncertain or tentative which are uncertain or tentative factors The actual amount recoverable is dependent upon a number of project (PMP38158). Tui future of estimates petroleum reserves, of include the level Such factors change. and which may be subject to at balance date believ The directors and legislative changes. tax losses and capital expenditures and of operating costs petroleum sale prices, by fi believe that the carried costs are recoverable through the Pike River project proceeding to development. to River project proceeding are recoverable through the Pike that the carried costs believe Petroleum exploration permits Petroleum Petroleum mining permit – mining permit Petroleum – mining licence Coal Petroleum mining licence – – mining licence Petroleum Charge to operating surplus Charge to expenditure and evaluation exploration accumulated Total forward carried Expenditure capitalised during the year: Petroleum and coal exploration, evaluation and development expenditure and development evaluation exploration, and coal Petroleum forward expenditure brought Accumulated Trade receivables Trade Field operation consumables Non-Current Assets interests Petroleum Assets Total Current Liabilities and borrowings Creditors Liabilities Total Ventures Joint held in Assets Net Current Assets securities and cash deposits Short term (ii) off. written amounts is net of Permits Exploration Petroleum in relation to Expenditure (iii) The amount carried in the fi partly owned subsidiary to PRCL. expenditure relates development Coal Notes: (i) and project (PML38146) the Kupe in respect of are carried forward costs and development evaluation exploration, Petroleum Included in the assets and liabilities of the NZOG group are the following following group are the NZOG the and liabilities. joint venture assets of and liabilities assets Included in the 12. PETROLEUM AND 12. COAL INTERESTS NOTES TO THE FINANCIAL STATEMENTS STATEMENTS FINANCIAL THE TO NOTES
New Zealand Oil & Gas Limited Annual Report 2006 28 New Zealand Oil & Gas Limited Annual Report 2006 29 ------12 12 91 103 794 296 (284) 2005 2005 2005 2005 $000 $000 $000 $000 47,341 47,341 llion) was llion) was ------12 70 70 58 88 158 2006 2006 2006 2006 $000 $000 $000 $000 1,345 - - - - - 12 12 91 65 55 (10) 103 296 (284) 2005 2005 2005 2005 $000 $000 $000 $000 2,891 - - 12 88 121 133 221 122 133 Consolidated Company Parent Consolidated Company Parent Consolidated Company Parent Consolidated Company Parent 643 2006 2006 2006 2006 $000 $000 $000 $000 9,788 2,622 2,622 17,747 16,982 (i) 21 (ii) Note ts such as accrued annual leave, long service leave, retirement and long service leave, such as accrued annual leave, ts Charge/(release) to operating surplus Charge/(release) to Closing balance Movements in employee provision in employee Movements Opening balance redundancy provisions. redundancy drawn. Refer also to note 16 for further details. further 16 for note to also Refer drawn. (i) Other Current Employee leave entitlements Trade creditors Trade Security deposits Borrowings taxation Deferred wholly owned subsidiary parent companies to from Advances Taxation receivable / (payable) receivable Taxation Non-Current rehabilitation Provision for Notes: employee benefi to relates employee entitlements The provision for (ii) million (NZ$16.98 mi US$10.4 balance date At development. Tui the fund million to US$27.5 of debt facility has a term NZOG (i) being met. commitments license work programme by government agencies subject to are held Security deposits 15. PROVISIONS PROVISIONS AND 15. NON-CURRENT LIABILITES 14. CREDITORS CREDITORS 14. 13. OTHER OTHER NON-CURRENT 13. ASSETS 2005 $000 are as the short exposure nts for for nts NZOG NZOG posits, posits, bt facility of of bt facility nancial ir value of these of ir value osts. At balance At osts. Rate 2005 $000 Interest 2006 $000 7,446 1,463 2,117 5,578 541 578 2,622 65 65 21,264 - - uctuations in world commodity prices. The Group is prices. uctuations in world commodity nancial instruments. However, the maximum amount of the maximum amount of However, nancial instruments. 2006 $000 3,661 4,583 2,622 nancial instruments at 30 June are as follows: at 30 nancial instruments 21,264 aturity Date aturity M Carrying ValueCarrying Value Fair Value Carrying Value Fair nancial instrument. nancial CONTINUED nancial instruments subject to credit risk. The group places its cash and short-term cash and short-term places its The group credit risk. subject to instruments nancial
nancial institutions with the intention of limiting the amount of credit exposure to any one fi any one credit exposure to of limiting the amount of with the intention nancial institutions bearing. are non-interest nancial instruments hort Term Securities and Cash Deposits Securities and Cash hortTerm Parent Company Parent resource companies in Investments New Zealand dollar bank and cash on depositNew Zealand dollar bank and cash on deposit States United Security depositsBorrowingsAll other fi call At call At 7.25% 5.00% Various March 2013 7.55% to 4.0% Variable Consolidated resource companies in Investments Security deposits Receivables follows: S Interest Rate Risk Rate Interest and borrowings cash deposits securities, short-term the group’s of maturity dates spread and the contractual rate The interest Foreign Exchange Risk Exchange Foreign and loan accou sales proceeds, permit interest oil sales and certain for bank accounts, dollar States United The group operates borrowings to fund developments. fund borrowings to Risk Price Commodity by fl be impacted will revenue sales is the risk that the Group’s price risk Commodity its of hedge a portion to require the Group agreements facility Bank mining interests. prices through its commodity exposed to Fa $2.8 million. at a cost of are included in prepayments oil price hedging relation to The premiums paid in oil price risk. to is $2.6 million. date oil price options at balance Credit Risk securities and cash de short term credit risk consist primarily of group to subject the which potentially Financial instruments and certain non current assets. debtors trade resource companies, in listed investments support fi by the group to is required No collateral through fi with and investments Fair Values Fair due to value fair approximates and creditors trade receivables securities and cash deposits, short term The carrying amount of institution. the above fi any of will arise from losses credit believe The group has no reason to the fi is the carrying of value be realised, which may possibly loss, trade receivables. provision is held in respect of Adequate these instruments. maturity of remaining fi the group’s of based upon net realisable value, values, fair Estimated Loan Facilities De Term are a The facilities development. Tui the fund to million available US$37.5 of has loan facilities NZOG balance date At US$25.0 million and a Letter of Credit facility of US$12.5 million. An additional US$2.5 million is available to fund hedging c fund to An additional US$2.5 million is available US$12.5 million. of Credit facility of US$25.0 million and a Letter drawn. was Debt facility Term the million of million and US$10.4 US$8.75 drawn to was Credit facility of the Letter date and Limited River Coal Pike Kupe, PML 38146 PEP 38483, other than those relating to assets is secured over NZOG’s This facility is repayable over 7 years. The facility Nominees Limited. NOTES TO THE FINANCIAL STATEMENTS STATEMENTS FINANCIAL THE TO NOTES FINANCIAL 16. INSTRUMENTS
New Zealand Oil & Gas Limited Annual Report 2006 30 New Zealand Oil & Gas Limited Annual Report 2006 31 - on to on to 2005 $000 7,352 with (7,352) 22,281 22,398 ng to ng to evaluation and evaluation nancial position nancial are no material are no material - 2006 $000 1,525 4,620 (1,525) 23,061 - 37 23 66 45 (2) 103 100 836 (813) 2005 $000 (100) t, including losses carried forward, at forward, carried including losses t, (2,463) 54,850 ------112 112 Consolidated Company Parent 832 (720) 2006 $000 2,521 76,893 (i) Note ed in note 11 and 22 as subsidiaries, 11 and 22 as subsidiaries, ed in note joint ventures and associates. on operating surplus t) operating attributable to t) t) at 33% t (consolidated from Pafule) from t (consolidated cit) before taxation cit) before cit) t is not virtually certain of being realised. of t is not virtually certain Movement during the year Closing balance before tax items before Income tax expense/(benefi Income Operating surplus/(defi Gross taxation losses not recognised New Zealand losses taxation Gross Adjusted for tax effect of: - New Zealand differences Permanent Consolidated from Pafule: differences Permanent surplus/(defi Income tax expense/(benefi Income tax benefi income Future Opening balance Income tax expense/(benefi tax rates in foreign Difference account not brought to losses Tax 30 June 2006 of $76,893,000 (2005: $54,850,000). These tax losses are not included as an asset in the statement of fi of in the statement included as an asset are not losses These tax $76,893,000 (2005: $54,850,000). June 2006 of 30 as the benefi meet the requirements of New Zealand tax legislation. tax legislation. New Zealand of meet the requirements years. as deductions in future become available to expenditures which are expected development i) tax expense Income ii) account into not taken losses Taxation Related parties of the company include those entities identifi parties of Related During the year the parent company charged at cost $511,000 to PRCL and received $95,000 from operated operated PRCL and received $95,000 from During the year the parent company charged at cost $511,000 to joint ventures in relati wholly owned subsidiary companies. place. transactions have taken parties with whom material There are no additional related management and technical servicesmanagement and technical provided. There 19 and 22. 15, 12, 11, 9, 6, 2, parties during the year are set out in Notes with related transactions All other material borrowings inter-company Company, the Parent in regards to except for, June 2006, parties at 30 related or from balances due to (a) subsidiaries and wholly owned & Gas Limited Oil Zealand New income tax benefi and wholly owned subsidiaries have a net future Gas Limited Oil & New Zealand (b) and Parent Consolidated (ii) exploration, primarily relating to (2005: $4,785,007) $20,034,000 of above include timing differences losses The taxation Notes: (i) group companies continui June 2006 is conditional on the relevant account at 30 not brought to losses taxation of The value 18. RELATED PARTY DISCLOSURES DISCLOSURES PARTY RELATED 18. 17. TAXATION 17. of of - - - - t d e an in 000 rs of rs of 2005 2005 the $000 2,603 Number e NZOG e NZOG - - - - 000 2006 2006 $000 2,280 Number 721 000 3.1% 2005 2005 $000 6,210 1,086 4,403 2,603 Number 143 000 665 NZOG SharesNZOG 2008 Options 7,471 2006 2006 $000 3.4% 1,535 - 5,128 2,280 Number rst tranche of such securities being 1.5 million shares. In addition, In addition, such securities being 1.5 million shares. rst tranche of CONTINUED c Petroleum NL (PPP) numbering 4,604,000 were subject to employee option rights at 30 June 2006 (2005: at 30 employee option rights subject to were NL (PPP) numbering 4,604,000 c Petroleum company’s ESOP. company’s to the respective employees in the case of allocated shares. The shareholders of Nominees hold the right to appoint the directo Nominees hold the right to of The shareholders shares. allocated the respective employees in the case of to Nominees. ability to issue unlisted partly-paid shares to employees, with the fi employees, shares to partly-paid unlisted issue ability to the Remuneration Committee allocated options over 1 million of the existing shares held by Nominees. options over 1 million of allocated Committee the Remuneration value at date of granting, to which an escalation factor generally applies. generally applies. which an escalation factor to granting, of at date value the ESOP and determines the numbers and exercise prices of options to be granted. Exercise prices are set at no less than marke set at no less prices are Exercise be granted. options to the numbers and exercise prices of the ESOP and determines securities used as security for borrowings by the NZOG group or any other person. person. group or any other borrowings by the NZOG securities used as security for 4,604,000). 1,440,845 unallocated PPP shares were held by the ESOP at 30 June 2006 (2004: 1,440,845). June 2006 at 30 PPP shares were held by the ESOP unallocated 1,440,845 4,604,000). options or other of the exercise held by Nominees from funds uncommitted from redeemed upon the company giving 60 days notice, the redemption received $322,500 from During the year NZOG is reasonably available. sources which Nominees determines available shares. preference • Savings shares paid shares • Partly capital reported total As a percentage of Investment and advancesInvestment Consolidated Company Parent Unallocated Unallocated Investment in shares Allocated to employees to Allocated purchase shares • Options to (c) Control shares an unallocated shares vest in Nominees as to NZOG in respect of rights Voting NZOG. company of Nominees is an associate (a) Plan (ESOP) Share Ownership Employee Description of of plan company and trustee of capacity securities in the company in its (‘Nominees’) held the following Nominees Limited NZOG Notes: (i) nor are th put or call options, are subject to securities held in the ESOP no NZOG Other than the above option allocations, (iv) Pacifi Shares in Pan (iii) provid Employee Share Ownership Plan to the Board amended the Company’s of Committee the Remuneration June 2006, As at 30 (ii) participate employees to nominates (which comprises only non-executive directors) Committee Remuneration Board’s The NZOG (b) Funding $ 2,280,000 (2005: $2,603,000) which can be of shares in Nominees at a book value group holds redeemable preference NZOG Nominees (2005: Nil). group from the NZOG are due to No advances (2005: $297,595). $ 297,595 to shares amounts acquire saving Funding made by employees to NOTES TO THE FINANCIAL STATEMENTS STATEMENTS FINANCIAL THE TO NOTES PLAN SHARE OWNERSHIP EMPLOYEE 19.
New Zealand Oil & Gas Limited Annual Report 2006 32 New Zealand Oil & Gas Limited Annual Report 2006 33 7 17 47 nture ing 404 03 (416) (153) million 2005 $000 2,187 2,187 (908) 2,153 1,902 ing of ing of 2,603 2,306 2,200 t of t of Pike River Pike normal 4 22 30 665 (153) (223) 2006 $000 (192) 2,190 2,037 1,525 2,057 2,057 2,280 2,059 - 47 (13) (2) (13) (13) (2) (13) 2005 $000 5,047 1,288 6,369 6,335 6,335 6,382 - (2) (2) 22 146 2006 $000 6,207 6,185 6,185 6,039 6,205 Consolidated Market Values Market Consolidated Costs Consolidated nancial statements. nancial rst half 2009. rst half nal scope and timing of operations. nal scope and timing of cit nancial statements are unaudited at the date of these NZOG fi these NZOG of at the date are unaudited nancial statements Accounting and legal fees Accounting Retained defi Retained diminution in value provision for Less Bank Equity Share capital Net Assets Less Liabilities Less Creditors securities / (gain) on sale of Loss • Unallocated income Interest Assets Securities: • Allocated decisions including fi operations to meet various operational expenditures. The actual costs will be dependent on a number of factors such as factors joint ve will be dependent on a number of The actual costs operational expenditures. meet various operations to (ii) Financial Performance (i) Financial Position developments. The group had no capital expenditure commitments at 30 June 2005. at 30 The group had no capital expenditure commitments developments. into PRCL has entered the overall development As part of 2005. made in September Investment Decision was River Formal The Pike comprising par June 2006, as at 30 committed which $5.6 million was of with road and tunnelling contractors, contracts material The company operates in the petroleum and coal industries in New Zealand. The company operates Expenditure Commitments Capital and Kupe Tui, the participation in the to in relation the group had certain capital expenditure commitments June 2006 As at 30 the total contract value. By way of agreement dated 7 August 2006, PRCL has agreed with ship builders to provide temporary fund to PRCL has agreed with ship builders August 2006, 7 agreement dated of By way contract value. the total approximately $1 million for certain ship design and funding costs. certain ship design and funding $1 million for approximately the project is US$2 for expenditure budgeted capital made in November 2005 and the total Investment Decision was Formal Tui The Group has an outstand NZOG balance date At 2007. by the second quarter be completed Group Share US$26 million) to million (NZOG development. Tui the US$12.5 million with suppliers in relation to credit of of letter the project is NZ$980 for capital expenditure budgeted June 2006 and the total made in Investment Decision was Formal The Kupe by the fi be completed million) to Group Share NZ$147 (NZOG Exploration Commitments (a) its as part of the group has ongoing commitments in which the group is involved, permits, maintain the various In order to The ESOP fi (d) the ESOP of and Performance Position Financial (b) being met. licensed work programme commitments $65,000) are held subject to $2,622,000 (2005: of Security deposits 20. GEOGRAPHICAL GEOGRAPHICAL 20. SEGMENTS COMMITMENTS 21. 72 is 60 50 (1.9) 2005 $000 nancial fi nning on or nancial fi 135,071,958 petroleum 61 60 50 Group Interest 2006 $000 1.0 cation differences that cation differences 2006 2005 214,227,892 (i) 19 Note 12(iii) cantly different if determined in determined if different cantly cant areas that are likely to be affected by the changes. be affected to cant areas that are likely nancial report would not be signifi CONTINUED ed the effects of the differences. Accordingly, there can be no assurances that the consolidated that the consolidated there can be no assurances Accordingly, the differences. of the effects ed nancial reporting and other related activities, then designing and implementing processes to deliver to then designing and implementing processes activities, nancial reporting and other related position as disclosed in this fi nancial exploration and production industry. The associate company is an investment company. Partly owned subsidiary Pafule Pty Limited owned subsidiary Partly Pafule company is an investment company. The associate exploration and production industry. PRCL is involved in the coal mining industry. an administration services company. Weighted average number of ordinary during the year used in the calculation shares outstanding average number of Weighted Pike River Coal Limited River Coal Pike Basic and diluted earnings cents per share earnings cents and diluted Basic Associate Companies Associate Nominees Limited NZOG Partly Owned Subsidiaries Pty Limited Pafule nancial reporting on an NZIFRS compliant basis, as well as dealing with any related business impacts. business as well as dealing with any related nancial reporting on an NZIFRS compliant basis, and fi nancial performance reporting standards on NZOG’s fi reporting standards on NZOG’s fi has not quantifi directors The board of fi New Zealand International Financial Reporting Standards (“NZIFRS”) apply to all New Zealand reporting entities for the periods reporting entities for all New Zealand (“NZIFRS”) apply to Standards Financial Reporting International New Zealand periods begi for voluntarily early adopting NZIFRS of Entities will also have the option January 2007. 1 commencing on or after January 2005. 1 after taxation, deferred In particular, policies and procedures. accounting the group’s a number of NZIFRS will affect to Transition and accounting for the signifi instruments joint ventures are some of presentation and classifi disclosures, the accounting policies, identify to The company will work through a process changes in of the impacts entails assessing This process are presented. the manner in which transactions or events would affect Wholly Owned Subsidiary Companies Wholly Owned (i)) (see note Pty Limited ANZ Resources Limited Petroleum Australia and New Zealand (in liquidation) Limited Delta Petroleum Limited Royalties Kupe Limited National Petroleum Limited Enterprises Nephrite Services NZOG Limited 38483 Limited NZOG 38484 Limited NZOG Oil Holdings Limited Limited Equities Petroleum Limited Resources Petroleum Limited Equities Resource Limited Company Petroleum Stewart Notes: company. registered (i) Australian (ii) IPO. PRCL in the planned to attributed held may vary depending on the value Interest (iii) All wholly owned subsidiaries are involved in the June. 30 of All subsidiary companies have a balance date and associate accordance with NZIFRS. Standards (IFRS). Reporting it will also be in compliance with International NZIFRS, transitions to has completed Once NZOG 24. INTERNATIONAL FINANCIAL REPORTING STANDARDS FINANCIAL REPORTING INTERNATIONAL 24. 23. EARNINGS PER SHARE 23. NOTES TO THE FINANCIAL STATEMENTS STATEMENTS FINANCIAL THE TO NOTES AND ASSOCIATES COMPANIES SUBSIDIARY 22.
New Zealand Oil & Gas Limited Annual Report 2006 34 New Zealand Oil & Gas Limited Annual Report 2006 3535 rm has rm nancial nancial cient evidence to to cient evidence nancial statements. It nancial statements. ows for the year ended the year ended for ows nancial statements; nancial nancial statements provide information about the past about the past provide information nancial statements nancial statements presented by the Directors and report by the Directors presented nancial statements as at that date. ed opinion is expressed nancial statements which give a true and fair view of the fi of view and fair which give a true nancial statements nancial statements are free from material misstatements, whether caused by fraud whether caused by fraud misstatements, material from are free nancial statements nancial position of the company and group as at 30 June 2006 and the results of their of June 2006 and the results the company and group as at 30 nancial position of ows for the year ended on that date. the year ended ows for nancial position of the company and group as at 30 June 2006. This information is stated in is stated This information 2006. June at 30 the company and group as of nancial position nancial statements on pages 18 to 34. The fi 34. on pages 18 to nancial statements and cant estimates the fi in the preparation of made by the Directors judgments nancial statements on pages 18 to 34: on pages 18 to nancial statements operations and cash fl rm has also provided other services to the company and certain of its subsidiaries in relation to taxation and general taxation in relation to subsidiaries its rm has also provided other services the company and certain of to - accounting practice; generally accepted comply with New Zealand - the fi view of give a true and fair consistently applied and adequately disclosed. applied and adequately consistently those records; of nancial performance and fi nancial performance To the Shareholders of New Zealand Oil & Gas Limited Zealand New the Shareholders of To the fi have audited We AUDIT REPORT AUDIT Our audit was completed on 29 August 2006 and our unqualifi on 29 completed Our audit was Wellington We conducted our audit in accordance with New Zealand Auditing Standards. We planned and performed our audit so as to our audit so as to and performed planned We Standards. Auditing our audit in accordance with New Zealand conducted We and explanations which we considered necessarywith suffi provide us in order to obtain all the information fi • the fi and 23. accounting policies set out on pages 22 accordance with the responsibilities Directors’ fi of the preparation for are responsible The Directors and cash fl their operations of June 2006 and the results and group as at 30 the company position of on that date. responsibilities Auditors’ an independent opinion on the fi express It is our responsibility to you. our opinion to opinion Basis of and disclosures in the fi the amounts to relevant evidence basis, on a test An audit includes examining, also includes assessing: signifi • the • circumstances, and group’s the company’s to the accounting policies are appropriate whether that the fi obtain reasonable assurance in the fi information the presentation of of the overall adequacy our opinion we also evaluated In forming or error. statements. Our fi The fi the company and group. of have not impaired our independence as auditors These matters accounting services. subsidiaries. its the company or any of in, or interest no other relationship with, opinion Unqualified and explanations we have required. all the information have obtained We In our opinion: • our examination as appears from the company as far by proper accounting records have been kept CORPORATE GOVERNANCE STATEMENT
The board of New Zealand Oil & Gas Limited recognises the need as chief executive are fully compatible with leadership of the for good corporate governance practice, and keeps under review board and facilitation of the effective contributions of all the issues relevant to a company of its size and nature. directors and that the company benefi ts from Mr Radford’s experience in these roles. The board has elected a deputy chairman, Prof. R F Meyer, who also chairs the remuneration and BOARD OF DIRECTORS audit committees of the board, thus ensuring a spread of key The board is responsible for the overall corporate governance responsibilities. The chief executive is not a member of those of the company including strategic direction, determination committees. of policy, and the approval of signifi cant contracts, capital and operating costs, fi nancial arrangements and investments. The RESPONSIBILITIES OF THE BOARD board has a formal charter whereby it has set out its functions as follows. The board operates under the powers provided in the company’s constitution, the Companies Act, and generally by law. The number of directors is specifi ed in the constitution as a minimum of three up to a maximum of seven. At least two Specifi c responsibilities of the board include: directors must be persons ordinarily resident in New Zealand. • approving corporate strategy, and performance objectives Each year one-third of the directors, other than the managing • establishing policies appropriate for the company director, must retire by rotation. If eligible each retiring director may offer themselves for re-election. • oversight of the company, including its control and accountability systems The board currently has a policy of having fi ve directors, with a • approving major investments and monitoring the return of majority of independent non-executive directors. The board has those investments determined that all of the existing non-executive directors are • evaluating the performance of the chief executive independent directors. • setting broad remuneration policy including approving allocations under the company’s employee share ownership Director Position Expertise plan Mr R A Radford Executive Chairman Resource company • reviewing senior management’s performance and implemen- CA(NZ) and Chief Executive management tation of strategy, and ensuring appropriate resources are available 36 Prof R F Meyer Deputy Chairman Engineering ONZM, BE, PhD, (non-executive) and energy • reviewing and ratifying systems of risk management and New Zealand Oil & Gas Limited DistFIPENZ internal compliance and control, codes of conduct, and legal compliance Mr P G Foley (non-executive) Legal BCA, LLB • approving and monitoring fi nancial and other reporting Mr S J Rawson (non-executive) Energy and trading • ensuring that the company provides continuous disclosure BSc, MSc of information such that shareholders and the investment community have available all information to enable them to Mr D R Scoffham (non-executive) Worldwide oil and make informed assessments of the company’s prospects MA, MSc and gas exploration • overall corporate governance of the consolidated entity. Annual Report 2006 Each director has the right to seek independent professional Responsibility for the conduct of the company’s business is advice in relation to matters arising in the conduct of his delegated to management. duties, at the company’s expense, subject to prior approval of the chairman of the audit committee, which is not to be The board has delegated limits of authority which defi ne matters unreasonably withheld. delegated to management and those requiring board approval.
Because of the compact size of the board there is no formally The board has overall responsibility for the company’s system constituted nomination committee. The board as a whole of risk management and internal control, and has established undertakes the responsibility for the appointment of directors, procedures designed to provide effective control within the benefi ting from the contribution of all its members in discussing management and reporting structure. Management represen- the need for and identifying any new candidates for the board. tations with respect to half-year and annual fi nancial reporting The board aims to have a reasonable diversity of backgrounds provide accountability on disclosures and fi nancial results. and skills within its ranks as is relevant to the nature of The board has established several formal policies for the company’s activities, and from time to time reviews its management, which include: committees and their charters. • securities trading policy The board evaluates its effectiveness as a whole, and the • funds investment policy performance and contributions of its individuals and its • health, safety and environment policy. committees as to attendance, preparedness, participation, and candour, on an annual basis. The board has regular meetings, These policies are reviewed on a regular basis. The board may scheduled on a monthly basis, and holds other meetings as establish other policies and practices to ensure it fulfi lls its required. Mr Radford is a founding executive director of the functions and remains an effective decision making body. company. The board considers that Mr Radford’s responsibilities BOARD COMMITTEES · fair dealing · protection of and proper use of company assets The board has two formally constituted committees to provide specialist assistance with defi ned aspects of governance; · compliance with laws and regulations the audit committee and the remuneration committee. Each · a general obligation to act honestly and in the best committee is comprised of three non-executive directors interests of the company as required by law and has a written charter setting out its respective roles and · encouraging the reporting of unlawful or unethical responsibilities. behaviour.
The audit committee is required to contain one member with an The code of business conduct and ethics is available on the accounting or fi nancial background. The board has determined company’s website. that Mr P G Foley has the requisite fi nancial background for this requirement. The board has a securities trading policy which sets out procedures as to when and how an employee or director can The members of the audit committee are Prof. R F Meyer deal in company securities. This policy is consistent with the (chairman), Mr D R Scoffham, and Mr P G Foley. The committee Securities Markets Act and its insider trading procedures and is responsible to the board for overseeing the fi nancial control, complies with the NZX and ASX rules. fi nancial reporting, and audit practices of the company. Meetings are held at least twice a year, and at the discretion of the The company maintains an interests register in compliance with committee the external auditors, the chief executive, and other the Companies Act 1993 which records particulars of certain senior executives attend these meetings. transactions and matters involving directors. Information from this register in respect of the year ended 30 June 2006 is The members of the remuneration committee are Prof. R F reported in page 40 of this annual report. Meyer (chairman), Mr P G Foley, and Mr S J Rawson. Meetings are held at least twice a year. The committee is responsible to the board for recommending the remuneration policies HEALTH, SAFETY AND ENVIRONMENT POLICY and packages for the chief executive and senior executives, The company’s health, safety and environment policy is that the including allocations under the employee share ownership company’s board, management and employees are committed to plan and amendments to plan rules. The committee operates providing a safe and healthy workplace and environment for all independently of management. employees, authorised visitors and general public: 37 The audit committee and remuneration committee charters • through competent engineering practice, training, risk New Zealand Oil & Gas Limited setting out roles and responsibilities are available on the identifi cation, assessment and control process, the company’s website at www.nzog.net. company addresses hazard, incident and injury prevention and conser vation of the environment in respect of projects under the company’s management; SHAREHOLDER REPORTING • appropriate resources are made available to comply with The company complies with the continuous disclosure and other all relevant legislation to ensure that safety in design, safe systems and places of work are maintained to high listing requirements of the NZX and ASX relating to shareholder standards and that all reasonable steps are taken to
reporting. The company provides security holders with interim Annual Report 2006 ensure no individual or the environment is placed in a and annual reports, which are also posted on the company’s situation of endangerment; website. Shareholders and interested parties can subscribe • a safe environment is the individual and shared to [email protected] to receive the company’s market responsibility of the company and all its employees; announcements by email. • this OSH&E management policy is based on a commitment that the well-being of all associated personnel is a major CONDUCT consideration of all operations.
Compliance with legislative requirements and acting with a high INDEPENDENT DIRECTORS level of integrity has always been expected of all directors and employees. The company has formalised its policy on business The board has determined in terms of NZX listing rules that as ethics. This policy records the existing high standards of ethical at 30 June 2006 Prof. R F Meyer, Mr P G Foley, Mr S J Rawson, conduct which all directors and employees are to comply with, and Mr D R Scoffham are independent directors; and that and addresses such matters as: Mr R A Radford is not an independent director. · confl icts of interest · corporate opportunities · confi dentiality, receipt and use of corporate information CORPORATE GOVERNANCE BEST PRACTICE CODES The company complies with the NZX and ASX Best Practice recommendations, excepting in the areas set out below. Further details are contained in the company’s Corporate Governance Statement on pages 36 and 37.
ASX RECOMMENDATIONS NZX LISTING RULE & CODE REASONS WHY NZOG ASX Corporate Governance Council OF BEST PRACTICE DOES NOT COMPLY Best Practice Recommendations
Roles of chairperson and chief executive Roles of chairperson and chief executive Refer to Corporate Governance Statement should not be exercised by the same should not be exercised by the same individual individual Establish a board nomination committee Establish a board nomination committee NZOG benefi ts from having the whole board (unless constrained by size) involved in the selection process for any board members Have formal and transparent methods for NZOG is too small to benefi t from this the nomination & appointment of directors recommendation Written policies to ensure compliance with NZOG is considered too small to benefi t from ASX listing rules disclosure requirements a written policy Directors encouraged to take a portion of A proposed allocation of share options to their remuneration under a performance- NZOG directors is to be considered at a based equity plan; or re-investment in equity future meeting of shareholders securities of the company Establish a code of conduct to guide NZOG is too small to benefi t from a formal obligations to legitimate stakeholders code Chairperson should be an independent Refer to Corporate Governance Statement director
SHAREHOLDER INFORMATION 38
New Zealand Oil & Gas Limited Top 20 Shareholders on the Register as at 25 August 2006
% of Name of Shareholder Shareholding reported capital*
Resources Trust Limited 11,068,325 5.16 Accident Compensation Corporation 10,481,410 4.89 Westpac Banking Corporation - client assets no 2 8,236,934 3.84 NZOG Nominees Limited 5,896,347 2.75 Sik-on Chow 4,740,000 2.21 Annual Report 2006 National Nominees Limited 3,068,736 1.43 Kum Hing So 2,802,318 1.31 New Plymouth District Council 2,228,853 1.04 Leveraged Equities Finance Limited 2,247,400 1.05 Macquarie Equities Custodians Limited 2,200,000 1.03 First NZ Capital Custodians Limited 1,973,256 0.92 Charles Elwyn Boreham & Denise Phyllis Boreham 1,719,484 0.80 Citibank Nominees (New Zealand) Limited 1,626,167 0.76 Robert Albert Boas 1,384,967 0.65 Chung King Tan 1,380,000 0.64 Oxley Graeme Maley 1,231,152 0.57 Ming Chow & Fook Kim Wong 1,200,000 0.56 Peter Edward Radford 1,182,122 0.55 ANZ Nominees Limited 1,167,638 0.54 Westpac Nominees (NZ) Limited 1,073,012 0.50 Held in Treasury: New Zealand Oil & Gas Limited 5,864,515
* Reported capital represents shares held by the public and therefore excludes 5,864,515 shares held by NZOG as treasury stock. In the above table, the holdings of New Zealand Central Securities Depositary Limited have been reallocated to its applicable members. Top 20 Option Holders on the Register as at 25 August 2006
% of Name of Option Holder Options 2008 Options on issue
Accident Compensation Corporation 3,891,374 3.63 Charles Brian Kidson 3,000,000 2.80 Roy Anthony Radford 2,979,954 2.78 First NZ Capital Custodians Limited 2,138,218 2.00 Ka Fu Tse & Lai Na Linda Tse Chan 1,700,000 1.59 Macquarie Equities Custodians Limited 1,100,000 1.03 Robert Albert Boas 912,500 0.85 Leveraged Equities Finance Limited 886,000 0.83 Charles Elwyn Boreham & Denise Phyllis Boreham 859,742 0.80 Petrus Fredrikus Maria Belt & Anna Maria Catharina Belt 800,000 0.75 David Maurice Hodson 698,750 0.65 Philip George Lennon 690,015 0.64 Chung King Tan 690,000 0.64 ANZ Nominees Limited 686,370 0.64 Westpac Banking Corporation - client assets no 2 662,606 0.62 Fulcrum Securities Limited 657,348 0.61 Andrew Trott Hopkins & Adrienne Janet Hopkins 620,000 0.58 Oxley Graeme Maley 615,576 0.57
Peter Edward Radford 591,061 0.55 39
John Kenneth Giffney & Rosalind Anne Giffney 550,000 0.51 New Zealand Oil & Gas Limited
DISTRIBUTION OF LISTED HOLDINGS SECURITIES ON ISSUE Ordinary shares as at 25 August 2006 At 30 June 2006 New Zealand Oil & Gas Limited had the following A minimum holding is 500 NZOG shares or more based on market securities on issue: prices applying on 26 August 2006. At that date there were 289 Reported Capital 214,378,727 shareholders with less than 500 shares. Treasury Stock 5,864,515
No. of Total Ordinary Shares on issue 220,243,242 Annual Report 2006 Holding Total Shares Shareholders 2008 Listed Options 107,097,549 1-1,000 3,143 2,167,765 Unlisted 2007 Options 150,000 1,001-5,000 4,546 12,045,852
5,001-10,000 1,603 12,769,083 VOTING RIGHTS 10,001-100,000 2,070 61,053,569 Article 26 of the company’s constitution provides that on 100,001 plus 239 132,208,135 a show of hands every shareholder present in person or by representative shall have one vote, and upon a poll, shall have Totals 11,601 220,244,404 one vote for each ordinary share held. 2008 Options as at 25 August 2006 ON-MARKET BUY-BACK No. of Option Holding Total Options Holders The company is not involved in an on-market buy-back. 1-1,000 4,942 2,537,645
1,001-5,000 3,764 9,631,273 TRADING STATISTICS 5,001-10,000 910 6,940,824 The company’s securities are offi cially quoted on the New 10,001-100,000 1,187 33,273,221 Zealand Exchange and the Australian Stock Exchange. 100,001 plus 168 54,703,424 Totals 10,971 107,086,387 TRADING – 12 MONTHS ENDED 30 JUNE 2006 DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE
Ordinary Shares: Trading Code NZX and ASX: NZO The company and its subsidiaries have arranged policies of directors’ and offi cers’ liability insurance, which, together with a High Low deed of indemnity, seek to ensure to the extent permitted by law NZX: NZ$1.11 NZ$0.80 that directors and offi cers will incur no monetary loss as a result of actions legitimately taken by them as directors and offi cers. ASX: A$1.04 A$0.73 Combined Volume Shares 68,692,045 SUBSTANTIAL SHAREHOLDERS Substantial Shareholder Notices as at 25 August 2006 2008 Options: Trading Code NZX: NZOOD ASX: NZOO Name of Shareholder Shareholding High Low New Zealand Oil & Gas Limited* 12,018,189 NZX: NZ$0.19 NZ$0.08 Resources Trust Limited 11,068,325 ASX: A$0.17 A$0.08 Total Issued Capital** 220,244,404 Combined Volume Options 48,207,500 * This incorporated NZOG’s treasury stock and NZOG Nominees Limited shareholding. STATUTORY AND OTHER INFORMATION ** Total issued capital includes treasury stock.
DIRECTORS’ REMUNERATION Substantial shareholder notices are received pursuant to the Securities Markets Act 1988. Under the provisions of that Act The total remuneration and other benefi ts to directors for substantial shareholders are only required to notify changes in services to all group companies (including payments made by relevant interests when those changes exceed 1% of the total partly owned and wholly owned subsidiary companies) in all issued voting securities; and more than one party can hold a capacities during the year ended 30 June 2006 was $845,646 relevant interest in the same shares. For those reasons the being to or in respect of Messrs R A Radford $656,250 ($226,250 number of shares stated in substantial shareholder notices can relating to the 2001, 2002 and 2003 fi nancial years); S J Rawson differ from the numbers currently showing in the share register. $54,396; P G Foley $35,000; Prof. R F Meyer $65,000 and D R Scoffham $35,000. NZOG GROUP Within this annual report reference to NZOG, NZ Oil & Gas and the EMPLOYEES’ REMUNERATION 40 company are to be read as inclusive of the subsidiary companies
New Zealand Oil & Gas Limited During the year ended 30 June 2006, 5 group employees (not within the consolidated group. including directors) received remuneration (including payments made by partly owned and wholly owned subsidiary companies) ENERGY VALUES of at least $100,000, one employee being in each of the following 1,000 standard cubic feet of gas yields approximately income bands: $100,000-$109,999; $130,000-$139,999: $150,000- 1 gigajoule of heat. $159,999; $240,000-$249,999; $280,000-$289,999. 1 petajoule (PJ) = 1,000,000 gigajoules (GJ) = approximately 1 billion DIRECTORS’ SECURITIES INTERESTS AND DEALINGS cubic feet (BCF). The interests of directors in equity securities of the company at 1 gigajoule = 947,817 British Thermal Units (BTU).
Annual Report 2006 30 June 2006 were: 1 kilotonne (kt) = 1000 tonnes.
Mr R A Radford in respect of 5,959,909 shares Gas energy values vary depending on the carbon dioxide, other and 2,979,955 options. inert gas and C2+ content of the gas, so is not fi xed. Energy levels for Taranaki gas are generally around the above levels. For Mr P G Foley in respect of 50,000 shares and 25,000 options. fi eld reserve estimates where the gas quality is known, reserves Mr D R Scoffham in respect of 100,000 shares can be accurately stated in PJ. For prospects where the gas and 50,000 options quality is not known, the BCF volume is estimated and the above assumptions are applied in order to use consistent units of PJ. ACQUISITION/DISPOSITION OF RELEVANT INTERESTS IN Calorifi c value is the basis for gas sales in dollars per gigajoule or SECURITIES OF THE COMPANY GJ. During the year Mr Foley as a shareholder received an entitlement to 25,000 options; Mr Scoffham as a shareholder received an CURRENCY entitlement to 50,000 options; and Mr Radford as a shareholder All amounts are New Zealand dollars unless otherwise specifi ed. received an entitlement to 2,979,955 options, and was awarded Conversions are based on a USD:NZD exchange rate of 0.6114 at 1,000,000 NZOG shares through the ESOP plan. 30 June 2006.
TRANSACTIONS IN WHICH DIRECTORS WERE INTERESTED TARGET PRODUCTION DATES AND CONSTRUCTION COSTS There were no transactions in which directors were interested Oil, gas and coal developments are subject to potential delays during the year ended 30 June 2006. and/or increased costs due to their nature and also due to the overheated construction market currently being experienced by INTEREST DISCLOSURES all participants. There were no new disclosures of interest by directors entered into the Interests Register during the year ended 30 June 2006. OIL PRICES All quoted and forecast oil prices are for WTI crude. CORPORATE DIRECTORY
DIRECTORS CONSULTANTS SHAREHOLDER INFORMATION
R A Radford Paul Ettema For information on number of shares or CA (NZ) BE (Hons) options held, holding statements and changes Executive Chairman and Chief Executive Engineering Advisor of address contact the registrars: R F Meyer Brian Roulston ONZM, BE, PhD, DistFIPENZ CA (NZ) NEW ZEALAND Deputy Chairman Corporate Services Consultant Link Market Services Limited P G Foley PO Box 384 BCA, LLB PIKE RIVER COAL LIMITED Ashburton S J Rawson MANAGEMENT New Zealand BSc, MSc Telephone + 64 3 308 8887 Peter Whittall D R Scoffham Facsimile + 64 3 308 1311 MBA , BE (Mining - Hons) (Australia) MA, MSc General Manager, Mines AUSTRALIA Sandra Scott MANAGEMENT BCA, CA (NZ) Registries Limited Financial Controller PO Box R67 Gordon Ward Les McCracken Royal Exchange BBS, CA (NZ) (BCE Mining-Hons) Sydney, NSW, 1223 Australia General Manager Project Manager Telephone + 61 2 9290 9600 Stefan Kleffmann Facsimile + 61 2 9279 0664 PhD For company information contact the Manager Geophysics REGISTERED AND HEAD OFFICE company: Helen Mackay Level 20 Toll free (within New Zealand) 0800 000 594 BCA, LLB 125 The Terrace 41 General Counsel Shareholders are encouraged to receive PO Box 10725
company announcements directly via the New Zealand Oil & Gas Limited Jonathan Salo Wellington, 6011 internet at: www.nzog.net PhD New Zealand Senior Manager Geology Telephone + 64 4 495 2424 Andrew Stewart Facsimile + 64 4 495 2422 MBA, BCA, BA, CA (NZ) Email: [email protected] Manager Accounting and Compliance AUDITORS
KPMG KPMG Centre
135 Victoria Street Annual Report 2006 Wellington, 6011 New Zealand and’s Energy Future New Zealand Oil & Gas Limited Annual Report 2006 [email protected]
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