Pike River tragedy burdens listed oil and gas company's books.

Receivers of Pike River Coal, where 29 miners were killed in a gas explosion  in November, said all potential buyers had given assurances in indicative bids that body recovery would not be impeded by any sale.

NZ Oil and Gas (NZX: NZO) shares have risen on news that the company intends to buy back up to 8.5 million fully paid ordinary shares.

The maximum purchase would be worth nearly $10.5m at the last traded price of $1.23.

In a statement to NZX today, the NZOG board expressed its view that current share prices are significantly below fair value and fail to reflect a reasonable current valuation of the company - even without taking into account growth prospects.

New Zealand Oil and Gas (NZOG) will pay a dividend for the third consecutive year – despite a net loss after tax of $3.3m in the year to 30 June 2010.

Last year, the company reported an after tax profit of $53.2m, largely driven by the ongoing success of the Tui area oil fields, in which NZOG holds a 12.5% stake.

This year’s results reflect a predicted decline in yield from Tui and a significant increase in exploration expenditure.

Total operating revenue this year sits at $99.4m, down 28% on last year.

NZ Oil and Gas (NZOG) shares dipped this morning on news that the Kahu-1 exploration well is to be abandoned.

After reaching a depth of 3,835m and hitting the target Kahu valley feature, no significant hydrocarbons were found, NZOG announced this morning. The well will now be plugged and abandoned.

Kahu-1, located three kilometres east of the producing Tui oilfield, is operated by Australian company AWE (42.5%) in partnership with NZ Oil and Gas subsidiary Stewart Petroleum (12.5%), Mitsui E&P Australia (35%) and Pan Pacific Petroleum (10%).