Ann: ADDRESS: NZO: Chairman's Address, New Zealand Oil & Gas AGM...

• Release Date: 29/10/15 09:29
• Summary: ADDRESS: NZO: Chairman's Address, New Zealand Oil & Gas AGM 2015
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					NZO
29/10/2015 09:29
ADDRESS
NOT PRICE SENSITIVE
REL: 0929 HRS New Zealand Oil and Gas Limited

ADDRESS: NZO: Chairman's Address, New Zealand Oil & Gas AGM 2015

Te Wharewaka Function Centre, Odlins Square, Jervois Quay, Wellington,
10:00am Thursday, 29 October 2015

Ladies and gentlemen
Welcome to the 2015 New Zealand Oil & Gas annual meeting.
In addition to the shareholders in the room, we have received proxies and
postal votes for more than 122 million shares representing 36% of the
company's capital.
A quorum is present and so I would like to call the meeting to order, and
introduce your board of directors.
My name is Peter Griffiths. I am the chairman of the board.
Shortly I will ask Mr Andrew Knight to speak to you and review the company's
performance in the year past.
This will be followed by shareholders' questions. We have received some
questions in advance of the meeting. After those we will take discussion from
the floor.
We have three resolutions to vote on, including two directors who are making
themselves available for re-election - Mr Finlay and Mr Tume. We will hear
from both of them 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 management and directors.
One topic I know you will want to raise is the effect of the oil price on the
business, and how we are responding.
Oil prices seem to have settled at around US$50. The World Energy Council
recently surveyed more than a thousand energy leaders around the world, and
they said the number one issue keeping them awake at night is price
volatility.
Despite this, global demand for energy is continuing to rise by around 2 per
cent a year and expert commentators generally predict a rising price in the
future. When prices will begin to rise again is uncertain, and therefore we
are planning on prices being lower for longer.
That is the same broad scenario expected when we met last year. I set out the
board's strategy to respond, and it remains the same.
First, we are looking to improve the performance of our existing producing
assets. It was pleasing to be able to announce yesterday that our reserves in
the Kupe field have been upgraded by around 35 per cent, which is a
demonstration of the success of our focus on optimising our production
assets.
Second, we expect to maintain our exploration spend at very modest levels for
the present time.
The exploration activity we do conduct is prudently re-focused on prospects
that have robust economics at lower price levels. This drives attention in
two directions: Seeking larger opportunities; and also seeking opportunities
where costs of exploration are lower or where prices are better.
Consequently you have seen our emphasis on the Canterbury basin where we have
large opportunities, such as the Barque prospect where we announced
world-scale volumes of prospective resource; And at the same time we are
continuing our work in onshore Indonesia where costs are lower and demand for
energy and gas prices remain strong.
The third leg to our strategy is to seek to buy undervalued assets where we
can add value.
The fall in oil prices has stressed many of our competitors. As they redraw
their balance sheets to cope with changing circumstances, we expect to see a
flow of asset sales. So far this has taken longer to occur than we thought it
would but more opportunities are emerging. We are prepared to be patient to
ensure we can obtain value and we will continue to look for assets that fit
with our current portfolio and offer potential for growth in reserves and
production.
Our on market purchase of 48% of Cue Energy is a good example.
Cue brings us additional production in New Zealand through its interest in
the Maari oil field. It also has production in Indonesia. Our interest in Cue
also allows us to share costs across a wider portfolio.
So in summary, we are preparing for the present oil price environment to
continue, and responding by optimising our efforts, prudently focusing our
exploration efforts and keeping spending on exploration at very modest levels
while we look to buy more assets where we can achieve value.
We are confident that this strategy will serve us well in the future.
In closing I would like to thank you for your support of the company during
the past year.
I will now ask Andrew Knight to speak to the year's results in some detail
and then we will take questions.

Further enquiries:
John Pagani
External Relations Manager
+6421570872
End CA:00272479 For:NZO    Type:ADDRESS    Time:2015-10-29 09:29:05