Ann: ASSET: NZO: Pike River Coal Limited sale agr

• Release Date: 11/05/12 10:30
• Summary: ASSET: NZO: Pike River Coal Limited sale agreement
• Price Sensitive: No
• Download Document  3.08KB

					

NZO
11/05/2012 08:30
ASSET

REL: 0830 HRS New Zealand Oil and Gas Limited

ASSET: NZO: Pike River Coal Limited sale agreement

NZOG (New Zealand Oil & Gas Ltd) welcomes the announcement that Solid Energy
has signed a sale and purchase agreement with the Receivers for Pike River
Coal Ltd (in receivership) (PRC).

A wholly owned subsidiary of NZOG, as a secured creditor, arranged for the
appointment of Receivers to PRC in December 2010 at the request of the Board
of PRC and since then has been supporting both the mine stabilisation efforts
and the sales process.

The structure of the sale agreement reflects the complexity of the issues
that will need to be managed by the purchaser, with completion subject to a
number of conditions precedent.

Solid Energy will pay an initial purchase price to PRC of $7.5 million, with
$2.5 million payable on signing of the sale agreement, $1.25 million payable
on 30 September 2012 (if completion has not occurred at that point in time)
and the balance payable on completion.

In addition, Solid Energy will pay a further $25 million (Deferred Payment)
by instalment commencing when extraction from the mining permit area over a
consecutive 12 month period reaches 250,000 tonnes or when total aggregate
extraction over any period reaches 1.25 million tonnes, whichever occurs
first. Once that trigger date is reached, if due to the 250,000 tonne
trigger, Solid Energy will pay $2.5 million.

On each anniversary of the trigger date until the Deferred Payment has been
paid in full, Solid Energy will pay a further instalment based on the
relevant coal extraction of the previous 12 months calculated in accordance
with the following table plus interest at half of the 90 day bank bill rate:

Coal extracted per applicable period (tonnes)- Per tonne payment rate $
Where coal extracted in the applicable period is less than 250,000 tonnes:

1 to 150,000   0.00
150,001 to 249,999 5.00

Where coal extracted in the applicable period is 250,000 tonnes or more:

1 to 300,000      10.00
300,001 to 350,000 11.25
350,001 to 400,000 12.50
400,001 to 450,000 13.75
450,001 and above 15.00

Both the per tonne payment rates set out in the table above and the Deferred
Payment will be increased for inflation commencing from the trigger date.

Completion under the sale agreement remains conditional on satisfaction of
various conditions, the most material of which are:
o the Minister of Energy and Resources consenting to the transfer of the
various permits;
o the Minister of Conservation and certain third parties consenting to the
transfer of various access agreements; and
o Solid Energy and NZ Police executing a reimbursement deed in relation to
the costs incurred by NZ Police which Solid Energy has agreed to meet in a
form acceptable to PRC.

Solid Energy and the Crown also have to conclude documentation relating to
how the possible recovery of the 29 lost men will be pursued.

Given the conditionality of the sale agreement, NZOG does not currently
expect that this transaction will impact materially on NZOG's results for 30
June 2012.
End CA:00222740 For:NZO    Type:ASSET      Time:2012-05-11 08:30:12