New Zealand Oil & Gas has agreed to sell its 27.5% interest in the Tui area oilfields off the coast of Taranaki after accepting an offer from Tamarind.

Based in Kuala Lumpur, Tamarind will pay $750,000 to acquire all New Zealand Oil & Gas shares in Tui holding company, Stewart Petroleum.

Last December, Tamarind announced its plan to buy 57.5% interest of the operator AWE.

In the Tui field, Stewart Petroleum owned a 27.5% stake and an inventory of $4.7m of oil.

New Zealand Oil & Gas chief executive Andrew Jefferies said: “The sale of the Tui interest allows New Zealand Oil & Gas to realise the present value of remaining Tui reserves, while reducing exposure associated with the uncertain end-of-field cessation costs and timing.”

Jefferies added: “New Zealand Oil & Gas analysed the Tamarind offer and finds it compelling based on Tamarind’s specialist end-of-field-life capability, including optimising late-stage production and abandonment operations.

"The sale of the Tui interest allows New Zealand Oil & Gas to realise the present value of remaining Tui reserves."

“Since the Pateke-4H well went into production in April 2015, Tui production has been in line with our expectations and our valuation of this transaction secures that production profile in today's dollars, while it also means we minimise financial risks associated with the abandonment of the facility.”

The transaction carries an effective date of 1 January 2017.

Tamarind managing director Ian Angell said: “This acquisition is a logical next step in our investment in New Zealand and in the Tui Area. By acquiring this additional stake, we will be able to move quickly and in a focused manner to bring our field-life extension plan to fruition.

“While there is much discussion about field decommissioning, Tamarind is confident with the strength of the Tui operating team in New Plymouth, this area will have many years of remaining production.”

Following the deal, $6m working capital will be transferred to Tamarind, which will also assume all field retirement obligations.