Ann: ADDRESS: NZO: Annual Meeting, Chairman's Address

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					NZO
04/11/2014 08:55
ADDRESS

REL: 0855 HRS New Zealand Oil and Gas Limited

ADDRESS: NZO: Annual Meeting, Chairman's Address

Peter Griffiths
Chairman
InterContinental Hotel, 2 Grey St, Wellington 9.30AM Tuesday, 4 November
2014.

Ladies and gentlemen,

In addition to the shareholders in the rooom I am advised we have received
proxies and postal votes for more than 179,000,000 shares representing some
42% of the company's capital.

My name is Peter Griffiths. I have the honor of being the chairman of the
board. I would like to welcome you to the 2014 New Zealand Oil & Gas annual
meeting, and introduce your board of directors.

Shortly I will ask Mr Andrew Knight to give his presentation.

This will be followed by shareholders' questions and then we will deal with
the resolutions foreshadowed in the notice of meeting.

We will hear from both of the new director nominees, and you will have the
opportunity to put questions to them.

After the meeting we ask you to join us for a cup of tea, and there will be
an opportunity to meet the management and directors.

Andrew will provide you with detail of the company's activities during year
in review and something about what lies ahead. I will confine my remarks to
three areas: the board, our strategy, and capital management.

Board
As part of our on going process of board renewal Mr David Scoffham and Mr
Paul Foley are stepping down as directors at the end of this meeting. Both
have given dedicated and committed support to New Zealand Oil & Gas through
the ups and downs of the enterprise over many years. On behalf of the board I
wish to record our sincere appreciation and thanks for their service. Thank
you David and thank you Paul.

As I just mentioned, later in the meeting you will have the opportunity to
elect two new directors: Dr Rosalind Archer and Mr Duncan Saville. Their
election will bring the number of new directors appointed to the board since
our 2012 annual meeting to five. Looking to the future I am confident that
this refreshed board continues to encompass the range of skills and corporate
experience essential for the successful and safe governance of your company.

Strategy
The board has recently conducted a review of the company's strategic
direction and has confirmed we will continue seeking to create sustained
shareholder value from a portfolio of oil and gas production and exploration
assets.

However what will change during the next period is the focus, of our efforts,
the balance in our portfolio and our style. We will concentrate on two paths
for growth.

Firstly: ACQUISITION.
We consider the current market dislocation provides significant opportunity
to acquire production and reserves at attractive prices and we will seek
transactions that create compelling value.

Broadly we will consider the quality of assets, the value created and the
do-ability of the transaction. Currently we are actively reviewing a number
of possibilities and we will continue to seek further opportunities as we
consider the current market in our sector both locally and internationally
provides us a favourable environment.

Secondly: EXPLORATION.
We will also continue to grow value around our portfolio of exploration
acreage by increasing the focus on its optionality but we will set a higher
hurdle for investing cash in exploration into the future.

The New Zealand exploration opportunity remains attractive to us. It has
vast, under- explored basins, an acceptable financial regime, a regular
process for bidding for acreage and it is attracting credible large explorers
including Woodside, Shell, Anadarko, and Statoil.

But New Zealand also has significant challenges for us. It is inevitably high
cost due to its remoteness from major centres of oil activity.

Its geology is challenging, with a limited data set for such a vast area.

As community interest in our activities increases, their expectations are
heightened.

We have a new regulator, the EPA. They are bedding in their new legislation
and regulatory framework. This is welcomed by the industry, however new
relationships do take time to develop and become effective.

New Zealand Oil & Gas is well-placed to take advantage of the opportunities
that New Zealand provides. We believe we have established ourselves as the
New Zealand partner of choice and our efforts to work with local communities
have borne fruit.

We are now an active explorer, regularly taking up and releasing acreage,
maintaining a diverse portfolio of inshore and deepwater opportunities in the
traditional basin of Taranaki and further afield in the Canterbury and Great
South basins.

Outside New Zealand we are very pleased with the progress our Indonesian
interests.

Development and production can be expected within the next calendar year and
the results of seismic work recently carried out are likely lead to further
drilling opportunites

Finally, we will enhance the focus on our costs. While we consider we
currently benchmark well against competitors we will ensure we have set our
overheads to a level commensurate with the operations of a safe and
cost-effective company
??????

Capital management
The company has a robust balance sheet with no debt, and in the near term we
expect increasing cash flows from increased levels of production at Tui.

Consequently, our cash on hand will grow well beyond what the business
requires for its planned activities.

Accordingly, with a view to improving the balance sheet performance of the
company the board has resolved to make a capital reduction equal to 15 cents
per share, which equates to approximately $60 million. The details of this
will require approval from shareholders and an extraordinary meeting will be
held promptly - hopefully before Christmas.

Dividends
While our cash flows will be strong, the company is not in a tax-paying
position. This is largely a consequence of New Zealand exploration expenses
being immediately tax deductible. We are not generating imputation credits.
Consequently the board does not expect to declare dividends for the near
term.

So in summary, we have a refreshed board, we have refreshed strategic
perspective and we will re-sharpen our focus on costs and creating an
efficient balance sheet.

I would like to thank you for your support of the company during the past
year.

As you will shortly hear form Andrew they have been busy and have an exciting
work program for the future.

Thanks very much, and I would now like to invite Andrew Knight to speak to
you.

Ends

For further Information
John Pagani
External Affairs Manager
+64 21 570 872
End CA:00257196 For:NZO    Type:ADDRESS    Time:2014-11-04 08:55:31