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Civitas ResourcesANNUAL
REPORT
2019
EXPLORERS FROM NEW ZEALAND NEW ZEALAND OIL & GAS SINCE 1981 3
4
7
8
10
37
40
41
43
44
45
46
64
68
Contents
Chairman and CEO’s Report
Production and Reserves
Reserves, Contingent &
Prospective Resources Statement
Sustainability Framework 2019 – Value Creation Process
Corporate Governance Statement
Shareholder Information
Consolidated Financial Statements
Consolidated Statement of Cash Flows
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Notes to the Financial Statements
Independent Auditor’s Report
Corporate Directory
Signed on behalf of the Board of New Zealand Oil & Gas Limited
on 26 August 2019.
Samuel Kellner
Chairman
Alastair McGregor
Director
2
New Zealand Oil & Gas Annual Report 2019 Chairman &
CEO’s Report
Tēnā koutou
The financial accounts enclosed report steady financial performance, reflecting a year in which the
company sought to implement a growth strategy.
Our earnest efforts to grow through transformational deepwater exploration and by acquiring
development and production have had to contend with an operating environment for oil and gas
investment in New Zealand that deteriorated after April 2018, when the New Zealand government
stopped awarding new offshore exploration permits.
With major global companies ending their exploration efforts in New Zealand, the perception of
New Zealand as an appealing place to invest has fundamentally changed.
A year ago, we stated, “Our growth strategy will likely be capital intensive, and we are planning for
acquisition and development costs considerably in excess of our current, substantial, cash reserves.
When the time is right, we expect to return to the capital markets, both for debt and equity, to help
fund acquisitions.” The information we have gathered over the past year has persuaded us that raising
the additional capital required on reasonable terms would be a reach in the current environment.
The board has responded to the changed environment by putting a scheme of arrangement to investors.
If the scheme of arrangement is approved, OGOG will buy the 30 per cent of shares in New Zealand Oil &
Gas that it does not already own. The scheme has been unanimously recommended to shareholders by
the independent directors.
If the scheme is approved, this will be the last annual report in a series that dates back to 1981.
We would therefore like to close by acknowledging that the future, one way or another, will look
different to the past.
Ka kite anō au i a koutou
Samuel Kellner
Chairman
Andrew Jefferies
Chief Executive
3
NEW ZEALAND OIL & GASNew Zealand Oil & Gas Annual Report 2019 Production
Actual and Forecast 2P Production
millions of barrels of oil equivalent
Kupe
Maari
Oyong
Wortel
0.6
0.5
0.4
0.3
0.2
0.1
0.0
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
Production
New Zealand Oil & Gas share (net)
Maari
Kupe
Sampang PSC
Some rounding. The New Zealand Oil & Gas interest in Maari and Sampang is held through Cue Energy. New Zealand Oil & Gas has a 50.04% interest in Cue.
Graphic shows Cue’s full interest.
4
201720182019120,000140,000160,000100,00080,00060,00040,00020,0000barrelsOilGasLPG1,8002,1002,4001,5001,2009006003000terajoulestonnes3,6004,2004,8003,0002,4001,8001,2006000152,201115,823130,2812017201820198981,0281,0222017201820193,1134,4033,9332017201820192,3501,5071,66220172018201945,84341,12246,32920172018201938,1213,0383,207New Zealand Oil & Gas Annual Report 2019
Reserves
Taranaki Basin
¬ Maari - Cue Energy 5%
¬ Kupe - New Zealand Oil & Gas 4%
Java
¬ Sampang PSC - Cue Energy 15%
New Plymouth
Madura Island
Wortel
Oyong
Jeruk
Sampang PSC
East Java
Maari
Kupe
Remaining Proven and Probable (2P) Oil & Gas Reserves as at 30 June 2019
Geographic area
Oil &
Condensate
(million barrels)
Natural Gas
(Petajoules)
LPG
(Kilotonnes)
Million
Barrels of Oil
Equivalent
r i
a
a
M
0.6 5 m m b o e
New Zealand
Maari
Kupe
Indonesia
Sampang PSC
Total
0.65
0.27
0.02
0.94
9.04
37.52
7.55
16.59
37.52
0.65
2.06
1.25
3.96
2.0
Kupe
6 m
mboe
S
a
1.2
m
p
5
a
n
m
g
m
P
b
S
o
C
e
Some rounding. Includes 100 per cent of Cue’s reserves. New Zealand Oil & Gas has a 50.04% interest in Cue.
Million barrels of oil equivalent have been calculated as the total oil equivalent of the oil, condensate/light oil, natural gas and LPG figures, using conversion
factors consistent with the Society of Petroleum Engineers (SPE) guidelines. Conversion factors used were: 163.40 terajoules of natural gas per barrel of oil;
8.15 barrels of oil equivalent per tonne of LPG.
5
NEW ZEALAND OIL & GASNew Zealand Oil & Gas Annual Report 2019
Proved (1P) Reserves at 30 June 2019
Developed
Undeveloped
Total
Gas
(PJ)
LPG
(kt)
Oil &
Condensate
(mmb)
Total
(mmboe)
Gas
(PJ)
LPG
(kt)
Oil &
Condensate
(mmb)
Total
(mmboe)
Gas
(PJ)
LPG
(kt)
Oil &
Condensate
(mmb)
Total
(mmboe)
2.63
11.10
0.30
0.09
0.30
0.61
2.65
10.86
0.00
0.11
0.00
0.63
0.00
0.00
5.28
21.96
0.30
0.20
0.30
1.24
Geographic area
New Zealand
Maari
Kupe
Indonesia
Sampang PSC
2.61
0.01
0.43
1.59
0.00
0.26
4.20
0.00
0.01
0.70
e
o
b
0.3 0
m
m
m
0
.
m
4
3
b
o
e
m
0
.
2
m
6
b
o
e
0 . 3 0
m b o e
m
m
0
.
7
m
0
b
o
e
m
0.61
mboe
m
3
b
o
e
m
0
.
6
m
m
1.24
boe
As at evaluation date 30/06/2019. Some rounding. Includes 100 per cent of Cue’s interests
in Maari and Sampang. New Zealand Oil & Gas has a 50.04% interest in Cue.
Maari
Kupe
Sampang PSC
Proved + Probable (2P) Reserves at 30 June 2019
Developed
Undeveloped
Total
Gas
(PJ)
LPG
(kt)
Oil &
Condensate
(mmb)
Total
(mmboe)
Gas
(PJ)
LPG
(kt)
Oil &
Condensate
(mmb)
Total
(mmboe)
Gas
(PJ)
LPG
(kt)
Oil &
Condensate
(mmb)
Total
(mmboe)
3.95
16.52
0.65
0.12
0.65
0.90
5.09
21.00
0.00
0.15
0.00
1.15
0.00
0.00
9.04
37.52
0.65
0.27
0.65
2.06
Geographic area
New Zealand
Maari
Kupe
Indonesia
Sampang PSC
5.75
0.02
0.96
1.80
0.00
0.30
7.55
0.00
0.02
1.25
e
0.6 5
m b o
m
m
0
.
m
9
b
6
o
e
m
0.90
mboe
0
b
e
o
0.3
m m
5
b o e
0. 6
m
m
m
1
.
m
2
5
b
o
e
1 .1 5
m m boe
m
2.06
mboe
As at evaluation date 30/06/2019. Some rounding. Includes 100 per cent of Cue’s interests
in Maari and Sampang. New Zealand Oil & Gas has a 50.04% interest in Cue.
Maari
Kupe
Sampang PSC
6
New Zealand Oil & Gas Annual Report 2019
Reserves, Contingent &
Prospective Resources Statement
Known accumulations are reserves or contingent resources that
have been discovered by drilling a well and testing, sampling or
logging a significant quantity of recoverable hydrocarbons.
Developed reserves are expected to be recoverable from
existing wells and facilities. Undeveloped reserves will
be recovered through future investments (e.g. through
installation of compression, new wells into different but
known reservoirs, or infill wells that will increase recovery).
Total reserves are the sum of developed and
undeveloped reserves at a given level of certainty.
All reserves and resources reported refer to hydrocarbon
volumes post-processing and immediately prior to point of
sale. The volumes refer to standard conditions, defined as
14.7psia and 60°F. Some differences may be due to rounding.
This resources statement is approved by, based on, and
fairly represents information and supporting documentation
prepared by New Zealand Oil & Gas Assets & Engineering
Manager Daniel Leeman. Daniel is a Chartered Engineer
with Engineering New Zealand and holds Masters degrees in
Petroleum and Mechanical Engineering as well as a Diploma in
Business Management and has over 10 years of experience.
Daniel is also an active professional member of the Society of
Petroleum Engineers and the Royal Society of New Zealand.
New Zealand Oil & Gas reviews reserves holdings twice a year by
reviewing data supplied from the field operator and comparing
assessments at scheduled Technical Committee Meetings.
Oil and gas reserves, and contingent
and prospective resources, are
reported as at 30 June 2019 and follow
the SPE PRMS Guidelines (2011).
The indicative Kupe reserves estimate is based on
approximately ten years of production data and a full
probabilistic uncertainty analysis of reservoir simulation
models provided by the field operator, Beach Energy,
with deterministic cases selected as appropriate.
The Maari and Sampang reserves report is based on
information provided by Cue Energy Resources. Maari is
independently assessed using deterministic well-by-
well decline curve analysis. The Sampang estimates
are based on deterministic decline curve analysis.
For the conversion to equivalent units, standard industry
factors have been used of 6Bcf to 1mmboe, 1Bcf to 1.05PJ,
1 tonne of LPG to 8.15 boe and 1TJ of gas to 163.4 boe.
Proven (1P) reserves are estimated quantities of
oil and gas which geological and engineering data
demonstrate with reasonable certainty (90% chance)
to be recoverable in future years from known reservoirs,
under existing economic and operating conditions.
Probable (2P) reserves have a 50% chance or better
of being technically and economically producible.
Estimates of Kupe, non-operated reserves are based
on their value in use with a discount rate of 10% applied.
The oil price assumptions are based on the Bloomberg
consensus mean, with contracted volumes of gas and LPG
sold on current contract terms. For volumes in excess
of current contracts, a future base market price of $6/
gigajoule is assumed for gas sales and LPG prices are linked
to the Bloomberg consensus mean forecast for oil.
7
NEW ZEALAND OIL & GASNew Zealand Oil & Gas Annual Report 2019 Sustainability Framework 2019
NEW ZEALAND OIL & GAS
– Value Creation Process
SUSTAINABILITY FRAMEWORK 2019 – VALUE CREATION PROCESS
FINANCIAL
CAPITAL
Our strong financial position, prudent financial
management and ability to attract investment
HUMAN
CAPITAL
Expertise, skills and engagement of our people
FIXED
CAPITAL
Our physical infrastructure and assets, primarily
owned and operated through joint venture or other
commercial arrangements, are fundamental to the
delivery of our purpose.
INTELLECTUAL
CAPITAL
Our technical expertise, data, models,
brand and reputation
NATURAL
CAPITAL
Inputs from the natural world including access
to oil and gas reserves, water, land and
minerals/materials required to support infrastructure
required in production
SOCIAL &
RELATIONSHIP
CAPITAL
Relationships are crucial to our success.
Within NZOG, with our existing joint venture
partners, with our communities, regulators and
prospective commercial partners, our social
license to operate is key.
8
Bringing Energy
Helping to meet the world’s energy needs in a safe & responsible way
Respect
Collaboration &
Communication
People
& Passion
Commercial
Focus
Our team of technical and commer cial experts add value
to exploration and production oppor tunities, to deliver energy
under safe, environmentally sound and commercially successful terms,
with long-term values-driven partnerships
ENERGY
SECURITY AND
AFFORDABILITY
We help deliver energy value through the supply of
natural gas in New Zealand, which supports renewable
energy electricity (especially in dry years), and
internationally, by providing supply, price stability,
and affordability.
∂ Leadership through
industry, policy and
regulatory forums
∂ Delivering gas to
market, in NZ, Australia
and beyond
A CLEAN AND
LOWER-CARBON
ECONOMY
We help deliver gas and light oil into the energy
system, bringing health and lower carbon benefits.
∂ Reporting commercial
and non-commercial
value transparently
WEALTH
CREATION &
PRODUCTIVITY
Gas and light oil energy inputs help to produce
goods and services society needs to prosper.
We contribute to New Zealand’s wealth and
productivity through royalties and tax
contributions that help to fund hospitals,
schools and other essential social services.
∂ Delivering commercial
value via annual taxes
and royalties,
job creation,
shareholder value
COMMUNITY
WELLBEING
Through our support and actions, local environments
and communities are strengthened through open
∂ Community and
Iwi Engagement
engagement, and contributions particularly relating to
∂ Community Partnerships
STEM education, energy efficiency/low carbon
behaviour change and conservation.
and Investment
$43.3
million revenue
2,535
TJ of
NATURAL GAS
tonnes of LPG 7
4,403
AWARDS
for YOUNG
SCIENTISTS
$10,000
for CURTAINS
for low income homes
1,800
Trees Planted
A GREAT PLACE
TO WORK
We are a highly engaged, skilled, safe, sustainable,
diverse and inclusive workplace
∂ Proactive diversity and
inclusion practices
∂ Greater environmental
contributions
New Zealand Oil & Gas Annual Report 2019UN SustainableDevelopment Goals (UNSDGs)OUTPUTSOUR MAGICVALUETHROUGHOUTCOMESOURINPUTSOUR VALUES
NEW ZEALAND OIL & GAS
SUSTAINABILITY FRAMEWORK 2019 – VALUE CREATION PROCESS
FINANCIAL
CAPITAL
Our strong financial position, prudent financial
management and ability to attract investment
HUMAN
CAPITAL
Expertise, skills and engagement of our people
FIXED
CAPITAL
Our physical infrastructure and assets, primarily
owned and operated through joint venture or other
commercial arrangements, are fundamental to the
delivery of our purpose.
INTELLECTUAL
CAPITAL
Our technical expertise, data, models,
brand and reputation
NATURAL
CAPITAL
Inputs from the natural world including access
to oil and gas reserves, water, land and
minerals/materials required to support infrastructure
required in production
SOCIAL &
RELATIONSHIP
CAPITAL
Relationships are crucial to our success.
Within NZOG, with our existing joint venture
partners, with our communities, regulators and
prospective commercial partners, our social
license to operate is key.
Bringing Energy
Helping to meet the world’s energy needs in a safe & responsible way
Respect
Collaboration &
Communication
People
& Passion
Commercial
Focus
Our team of technical and commer cial experts add value
to exploration and production oppor tunities, to deliver energy
under safe, environmentally sound and commercially successful terms,
with long-term values-driven partnerships
ENERGY
SECURITY AND
AFFORDABILITY
We help deliver energy value through the supply of
natural gas in New Zealand, which supports renewable
energy electricity (especially in dry years), and
internationally, by providing supply, price stability,
and affordability.
∂ Leadership through
industry, policy and
regulatory forums
∂ Delivering gas to
market, in NZ, Australia
and beyond
A CLEAN AND
LOWER-CARBON
ECONOMY
We help deliver gas and light oil into the energy
system, bringing health and lower carbon benefits.
∂ Reporting commercial
and non-commercial
value transparently
WEALTH
CREATION &
PRODUCTIVITY
Gas and light oil energy inputs help to produce
goods and services society needs to prosper.
We contribute to New Zealand’s wealth and
productivity through royalties and tax
contributions that help to fund hospitals,
schools and other essential social services.
∂ Delivering commercial
value via annual taxes
and royalties,
job creation,
shareholder value
COMMUNITY
WELLBEING
Through our support and actions, local environments
and communities are strengthened through open
∂ Community and
Iwi Engagement
engagement, and contributions particularly relating to
STEM education, energy efficiency/low carbon
behaviour change and conservation.
∂ Community Partnerships
and Investment
$43.3
million revenue
2,535
TJ of
NATURAL GAS
4,403
tonnes of LPG 7
$10,000
for CURTAINS
for low income homes
1,800
Trees Planted
A GREAT PLACE
TO WORK
We are a highly engaged, skilled, safe, sustainable,
diverse and inclusive workplace
AWARDS
for YOUNG
SCIENTISTS
∂ Proactive diversity and
inclusion practices
∂ Greater environmental
contributions
9
NEW ZEALAND OIL & GASNew Zealand Oil & Gas Annual Report 2019UN SustainableDevelopment Goals (UNSDGs)OUTPUTSOUR MAGICVALUETHROUGHOUTCOMESOURINPUTSOUR VALUES
Corporate
Governance Statement
New Zealand Oil & Gas Limited (the Company) is a limited liability
company registered under the New Zealand Companies Act 1993.
The Company is listed and its shares quoted on the Main Board
equity security market operated by NZX Limited (NZX) under the
code “NZO”.
This statement sets out the main corporate governance practices
adopted by the Company.
It is current to 30 June 2019 (unless a more recent date is expressly
stated), and has been approved by the board.
Corporate Governance Best Practice Codes
The Company regularly reviews and assesses the Company’s governance processes and policies
and monitors its compliance with corporate governance best practice. This includes assessing
compliance with the NZX Listing Rules and Corporate Governance Code 1 January 2019 (NZX Code).
This section of the report is structured to report performance against the principles of the NZX Code.
Information presented under each principle is followed by the NZX Corporate Governance checklist.
In complying with the NZX Code, the Company’s corporate governance outcomes also
substantively meet the principles of the FMA Corporate Governance Handbook.
The Company is compliant with these rules and guidelines except
as otherwise noted in the following pages.
Detail about the Company’s corporate governance, including the constitution, board and
committee charters, policies and frameworks is available in the corporate governance section
of our website at
www.nzog.com/investor-information/shareholders-information/corporate-governance/
This statement was approved by the board on 26 August 2019.
10
New Zealand Oil & Gas Annual Report 2019 PRINCIPLE
1
Code of Ethical
Behaviour
“Directors should set high
standards of ethical behaviour,
model this behaviour and hold
management accountable for
these standards being followed
throughout the organisation.”
New Zealand Oil & Gas Limited is committed to the
highest standards of corporate governance and aspires to
continuous improvement in its governance performance.
Code of Business Conduct and Ethics
The Company’s Code of Business Conduct and
Ethics sets out values and ethics expected
of the Company’s directors, management,
employees and dedicated contractors.
The Company strives to create a strong
culture of honesty, integrity, loyalty, fairness,
forthrightness and ethical behaviour.
Company representatives are required to:
¬ act with high standards of honesty, integrity,
fairness, and equity in all aspects of their
involvement with the Company;
¬ comply fully with the content and spirit of
all laws and regulations which govern the
operations of the Company, its business
environment, and its employment practices;
The board’s overarching governance objectives are:
¬ not knowingly participate in illegal or unethical activity;
¬ Ensure solid foundations for
management and oversight.
¬ Deliver high standards of transparency and
ethical and responsible decision-making.
¬ Structure itself to add value.
¬ Make timely and balanced disclosure.
¬ Respect the rights of shareholders.
¬ Safeguard integrity in financial reporting.
¬ Recognise and manage risks.
¬ Encourage enhanced performance.
¬ Promote a corporate culture that
upholds agreed Company values.
¬ actively promote compliance with laws,
rules, regulations, and the Company’s Code
of Business Conduct and Ethics; and
¬ not do anything that would be likely to negatively
affect the Company’s reputation.
The Code addresses in detail issues such as:
¬ conflicts of interest and corporate opportunities;
¬ protection and proper use of Company assets;
¬ confidential and proprietary information;
¬ intellectual property;
¬ competition and fair dealing;
¬ business entertainment and gifts;
¬ anti-bribery and corruption;
¬ cash koha;
¬ insider trading or tipping, and
¬ reporting of Code violations.
The Code of Business Conduct and Ethics
is available in the corporate governance
section of the Company’s website at
www.nzog.com/dmsdocument/188
11
NEW ZEALAND OIL & GASNew Zealand Oil & Gas Annual Report 2019 Corporate Governance Statement
Securities Trading Policies
Protected Disclosures (Whistleblower) Policy
The Company’s Securities Trading Policies set out
procedures about when and how an employee, dedicated
contractor or director can deal in Company securities.
These policies are consistent with the Financial
Markets Conduct Act 2013 and its insider trading
procedures, and they comply with the NZX listing rules.
The board ensures that these policies are
up-to-date and compliant at all times with
changes to the law and to NZX listing rules.
The Securities Trading Policies are available
on the Company’s website at:
For directors
www.nzog.com/dmsdocument/196
For employees and contractors
www.nzog.com/dmsdocument/195
The Company has a Protected Disclosures
(Whistleblower) Policy that provides a procedure
for company employees and contractors to
raise concerns or make disclosures about
what they observe happening at work.
The purpose is to facilitate disclosure and investigation
of serious wrongdoing. It provides a mechanism for
concerns being raised and dealt with at an early stage
and in an appropriate manner. The person making the
report is protected from any adverse consequences
where the concern is raised in good faith.
The Protected Disclosures (Whistleblower)
Policy is available in the corporate governance
section of the Company’s website at
www.nzog.com/dmsdocument/194
12
New Zealand Oil & Gas Annual Report 2019 NZX Code Recommendation
✔ ❘ ✗
Explanation of non-compliance
During the reporting period training was not specifically
provided to employees on the Company’s Code of Business
Conduct and Ethics policy, however the policy is readily
available to all employees via the intranet system. The
company’s values are incorporated into employees’ short
term incentives and relate in nature to the policy. Staff are
actively informed about trading blackouts, insider trading
obligations and the company’s values expectations.
1.1
The board should document minimum standards of
ethical behaviour to which the issuer’s directors and
employees are expected to adhere (a code of ethics).
The code of ethics and where to find it should be
communicated to the issuer’s employees. Training should
be provided regularly. The standards may be contained
in a single policy document or more than one policy.
The code of ethics should outline internal reporting
procedures for any breach of ethics, and describe
the issuer’s expectations about behaviour,
namely that every director and employee:
a)
acts honestly and with personal integrity in all actions;
b)
c)
d)
e)
f)
g)
declares conflicts of interest and proactively
advises of any potential conflicts;
undertakes proper receipt and use of corporate
information, assets and property;
in the case of directors, gives proper
attention to the matters before them;
acts honestly and in the best interests of the
issuer, as required by law, and takes account of the
interests of shareholders and other stakeholders;
adheres to any procedures around giving and
receiving gifts (for example, where gifts are given
that are of value in order to influence employees and
directors, such gifts should not be accepted);
adheres to any procedures about whistle blowing (for
example, where actions of a whistle blower have complied
with the issuer’s procedures, an issuer should protect
and support them, whether or not action is taken); and
h)
manages breaches of the code.
1.2
An issuer should have a financial product dealing
policy which applies to employees and directors.
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
13
NEW ZEALAND OIL & GASNew Zealand Oil & Gas Annual Report 2019 Corporate Governance Statement
PRINCIPLE
2
Board
Composition and
Performance
“To ensure an effective board,
there should be a balance of
independence, skills, knowledge,
experience and perspectives.”
14
Role of the Board
The board is responsible for the overall corporate
governance of the Company including strategic
direction, determination of policy, and the approval
of significant contracts, capital and operating
costs, financial arrangements and investments.
In addition to statutory and constitutional
requirements, the board has a formal charter
that sets out its functions and structure.
The Board Charter is available in the corporate
governance section of the Company’s website at
www.nzog.com/dmsdocument/371
Composition of the Board
The number of directors is specified in the constitution
as a minimum of three and up to a maximum of seven.
At least two directors must be persons ordinarily
resident in New Zealand. Dr Archer, Mr Jefferies and
Mr Ritchie are ordinarily resident in New Zealand.
Currently, under the Company’s constitution, one
third of the directors must retire by rotation each
year. However, this is scheduled to be updated at
the next Annual Meeting to align with new NZX
Listing Rules, which require directors to retire at the
third Annual Meeting since their last appointment,
or every three years (whichever is longer).
If eligible, each retiring director may offer themselves
for re-election.
Directors holding office during the accounting period
Dr Rosalind Archer
Elected 2 November 2018
Marco Argentieri
Rebecca DeLaet
Andrew Jefferies
Samuel Kellner
Elected 2 November 2018
Elected 2 November 2018
Elected 2 November 2018
Elected 2 November 2018
Alastair McGregor
Elected 30 October 2017
Rod Ritchie
Elected 28 October 2016
New Zealand Oil & Gas Annual Report 2019 Board of Directors
Samuel Kellner Board Chair
Samuel Kellner has held a variety of senior executive
positions with the Ofer Global Group since joining
the Group in 1980. He has been deeply involved in
various Ofer Global Group’s business lines, with a
particular emphasis on offshore oil and gas, shipping
and real estate, and has advised the Ofer Global Group
companies on investments in a variety of investment
managers, hedge funds and private equity funds.
Most recently, Mr Kellner served as president of Global
Holdings Management Group (US) Inc where he led
North American real estate acquisition, development
and financing activities. Mr Kellner serves as a
director of O.G. Energy, O.G. Oil & Gas and Cue Energy
Resources. He is also an executive director of the
main holding companies for the Zodiac shipping group
and Omni Offshore Terminals, a leading provider of
floating production, storage and offloading (FSO and
FPSO) solutions to the offshore oil and gas industry.
As a member of the O.G. Energy Senior Management
Committee, he helps drive the strategy for the
Ofer Global Group’s energy activities. Mr Kellner
graduated with a BA degree from Hebrew University
in Jerusalem. He has an MBA from the University
of Toronto, and taught at the University of Toronto
while working toward a PhD in Applied Economics.
Mr Kellner was appointed in December 2017. He is the
Chairman of the Board of Directors and a member
of the Nomination and Remuneration Committee.
Dr Rosalind Archer Independent Director
Dr Rosalind Archer joined the board of New Zealand
Oil & Gas in November 2014. Dr Archer graduated
with a BE from University of Auckland. Dr Archer
holds a PhD in Petroleum Engineering, and PhD
minor in Geological and Environmental Studies
from Stanford University. She is a professor at the
University of Auckland, and head of its Department
of Engineering Science. Dr Archer runs a consulting
practice as a reservoir engineer with clients locally
and internationally. She regularly speaks on reservoir
engineering topics at international conferences.
Dr Archer is also a Chartered Member of the
Institute of Directors, a director of the University of
Auckland Geothermal Institute, and Vice President of
Engineering New Zealand. She chairs the Nomination
and Remuneration Committee and is a member of
the Audit Committee and the HSSE Committee.
Marco Argentieri Director
Marco Argentieri is Senior Vice President and
General Counsel for O.G. Energy, and a member of
the Board of Directors of both O.G. Energy and O.G.
Oil & Gas. As a member of the O.G. Energy Senior
Management Committee, he helps drive the strategy
for the Ofer Global Group’s energy activities.
Mr Argentieri serves as the chief legal counsel for
the O.G. Energy Group, where he advises on financing
activities, acquisitions, and other commercial and
corporate matters. Mr Argentieri has worked for the
Ofer Global Group since 2006, where he previously
served as chief legal counsel responsible for Ofer
Global Group finance activities, with a particular
focus on the Group’s offshore oil services and
shipping businesses. Prior to joining Ofer Global,
Mr Argentieri was an attorney at the New York
offices of Latham & Watkins LLP and Skadden, Arps,
Slate, Meagher & Flom LLP. He holds a B.A. from
the University of Rochester, a J.D. from New York
University and an MBA from Columbia University.
Mr Argentieri joined the board in July 2018.
Rebecca DeLaet Director
Rebecca DeLaet has worked for the Ofer Global
Group of companies since 1990. For the last
ten years she has overseen the Group’s finance
activities, including debt and equity financing,
treasury operations and risk management. Ms
DeLaet was responsible for the initial structuring
and capitalisation of Omni Offshore Terminals’
assets in 1994, establishing an independent
oil and gas arm for the Ofer Global Group. Since
then, she has been responsible for all of the
financing activities for the Omni organisation.
Ms DeLaet is a director of O.G. Energy, O.G. Oil &
Gas and Cue Energy Resources, where she is the
chair of the Audit Committee. As a member of
the O.G. Energy Senior Management Committee,
she helps drive the strategy for the Ofer Global
Group’s energy activities. She has a Masters
in Finance and Bachelor of Science from the
Wharton School at the University of Pennsylvania.
Rebecca DeLaet joined the board in December
2017. She chairs the Audit Committee.
15
NEW ZEALAND OIL & GASNew Zealand Oil & Gas Annual Report 2019 Corporate Governance Statement
Andrew Jefferies Managing Director
Rod Ritchie Independent Director
Rod Ritchie joined the board of New Zealand
Oil & Gas in 2013. He graduated with a BSc,
from the University of Tulsa. He has 38 years of
experience as a line manager and a Health, Safety,
Security and Environment executive in the oil
and gas industry – including being the corporate
senior vice president of HSSE at OMV based in
Vienna. He is a member of the Society of Petroleum
Engineers. Mr Ritchie joined the board in October
2013. He chairs the HSSE committee and he is a
member of the Audit Committee and the Nomination
and Remuneration Committee.
7
6
5
4
3
2
1
0
Board Gender Composition
5
5
2
2
2019
2018
Male
Female
Mr Jefferies started his career with Shell in Australia
after graduating with a BE Hons (Mechanical) from the
University of Sydney in 1991, an MBA in technology
management from Deakin University in Australia , and
an MSc in petroleum engineering from Heriot - Watt
University in Scotland. Andrew is also a graduate
of the Australian Institute of Company Directors
(GAICD), and a Certified Petroleum Engineer with
the Society of Petroleum Engineers. He has worked
in oil and gas in Australia, Germany, the United
Kingdom, Thailand and Holland. He is a director
of Cue Energy and the Petroleum Exploration and
Production Association of New Zealand (PEPANZ).
Andrew Jefferies joined New Zealand Oil & Gas in
2013 and became chief executive in 2016. He joined
the board in December 2017. He is a member of the
Commercial Committee and the HSSE Committee.
Alastair McGregor Director
Alastair McGregor has been actively involved in
the oil & gas sector since 2003. He is currently
chief executive of O.G. Energy, which holds the Ofer
Global Group’s broader energy interests, and O.G.
Oil & Gas Limited, a company that holds directly
or indirectly oil & gas exploration and production
interests onshore and offshore. He leads the O.G.
Energy Senior Management Committee, driving
the strategy for the Ofer Global Group’s energy
activities. Mr McGregor is also the Chairman of the
Board of Directors of Cue Energy Resources.
p
p
oint
m
2
0
1
7
2018
In addition, Mr McGregor is chief executive of Omni
Offshore Terminals Limited, a leading integrated
provider of floating production and storage and
ent
offloading (FPSO & FSO) solutions to the offshore
oil & gas industry. Omni’s operations span the globe
from New Zealand, Australia, South East Asia, Middle
East and South America. Prior to entering the oil
& gas industry Alastair spent 12 years as a banker
with Citigroup and Salomon Smith Barney. Alastair
holds a BEng from Imperial College, London and an
MSc from Cranfield University in the UK. Mr McGregor
joined the board in October 2017. He is a member
of the Commercial Committee, the Nomination and
Remuneration Committee and the HSSE Committee.
2
0
1
3
Y
2
0
e
1
4
a
r
o
f
F
ir
s
t A
16
New Zealand Oil & Gas Annual Report 2019
Independent Directors
Number of Directors with Specific Skillset
Oil & Gas
Finance & Economics
In terms of the NZX Listing Rules and NZX Code
as at 30 June 2019, Dr Archer and Mr Ritchie are
independent directors as there is a complete absence
of factors described in the NZX Code that may
impact independence.
Mr Kellner, Mr Argentieri, Ms DeLaet, and Mr McGregor
are not independent because of their association
with O.G. Oil & Gas Limited, which is a substantial
shareholder in New Zealand Oil & Gas Ltd.
Mr Jefferies is not independent because he is the
managing director of New Zealand Oil & Gas.
7
6
5
4
3
2
1
3
2
1
4
2
0
1
3
Y
2
0
e
1
4
a
r
o
f
F
ir
s
t A
p
p
oint
2
0
1
7
m
ent
2018
HSSE
Executive Management
Engineering
& Operations
Exploration
M&A
Legal
17
NEW ZEALAND OIL & GASNew Zealand Oil & Gas Annual Report 2019
Corporate Governance Statement
Board Proceedings
Responsibilities of the Board
The board meets on a formal scheduled basis four
times per year, and holds other meetings as required.
The Commercial Committee establishes the agenda for
each board meeting. The chief executive otherwise keeps
the board informed of material or potentially material
matters between meetings and provides a weekly
update on all relevant matters to the board. A report
is prepared for each meeting that includes: updates
on exploration and production activities and financial
management; summaries of new business opportunities;
an update on human resources and facilities; an investor
relations report; updates on stakeholder engagement,
media and sustainability; and other reports as relevant.
Key strategic issues and opportunities are also presented
to the board by management as part of each meeting.
To ensure that independent judgement is achieved and
maintained in respect of its decision making, the board
has adopted a number of processes which includes:
The board is accountable for the performance of the
Company. The specific responsibilities of the board include:
¬ approving corporate strategy and
performance objectives;
¬ establishing policies appropriate for the Company;
¬ oversight of the Company, including its
control and accountability systems
¬ approving major investments and monitoring
the return of those investments;
¬ the overall risk management and control framework
for the Company and ensuring appropriate risk
management systems are established and applied;
¬ appointing, removing and evaluating the
performance of the chief executive;
¬ reviewing the performance of senior management;
¬ appointing and removing the company secretary;
¬ any director may, with the prior consent of the
¬ setting broad remuneration policy;
chair of the Audit Committee (or in the case of the
Audit Committee chair’s absence, the prior consent
of the chair of the board), obtain independent
advice at the Company’s expense where the
director considers it necessary to carry out their
duties and responsibilities as a director. Such
consent shall not unreasonably be withheld; and
¬ directors must comply with the Directors’
Interests Policy, which addresses disclosable
interests, conflicts of interest, director information
obligations, board review and determination
obligations, and the rules for participation in board
deliberations in the event of a conflict of interest.
On appointment, each director has also acknowledged
their individual disclosure obligations.
18
¬ reviewing implementation of strategy and
ensuring appropriate resources are available;
¬ nominating and appointing new directors to the board;
¬ evaluating the performance of the board,
committees of the board, and individual directors;
¬ reviewing and ratifying systems of risk
management, internal compliance and control,
codes of conduct, and legal compliance;
¬ approving and monitoring the progress of any
major capital expenditure, capital management
and acquisitions and divestitures;
¬ reviewing and ratifying HSSE Sustainability and
Operational Risk policies, the HSSE Sustainability
and Operational Risk Management System and
monitoring its implementation and performance;
¬ approving and monitoring financial and other reporting;
¬ ensuring that the Company provides continuous
disclosure of information such that shareholders
and the investment community have available
all information to enable them to make informed
assessments of the Company’s prospects;
¬ overall corporate governance of the consolidated entity;
¬ determining the key messages that the Company
wishes to convey to the market from time to time; and
¬ monitoring information commitments and
continuous disclosure obligations.
New Zealand Oil & Gas Annual Report 2019 Delegation to Management
Delegated Authorities Manual
The board has established formal limits of authority to
provide clarity to the chief executive and management
so that they are in a position to carry out the business
of the Company efficiently and effectively within the
parameters of proper corporate governance. The
Delegated Authorities Manual set limits to financial
commitments and other decision-making, and is
monitored by the board through the audit function.
While the board has overall and final responsibility for the
business of the Company, it has delegated substantial
responsibility for the conduct and administration of
the Company’s business and policy implementation to
the chief executive and his management team. Board
approved policies and procedures are in place to set
parameters for the delegated responsibilities, including:
¬ Health and Safety Policy;
¬ Environment Policy;
¬ Capturing Local Economic Benefit Policy;
¬ Code of Business Conduct and Ethics;
¬ Communications, Market and Social
Media Disclosure Policy;
¬ Securities Trading Policies for Directors,
Employees and Dedicated Contractors;
¬ Directors’ Interests Policy;
¬ Protected Disclosure (Whistleblower) Policy;
¬ Diversity Policy;
¬ Delegated Authorities Manual;
¬ Remuneration and Performance Appraisal Policy;
¬ Treasury Policy;
¬ ETS Obligations and Carbon Liability: Transactions Policy;
¬ Email and Internet Use Policy;
¬ Anti-Harassment Policy; and
¬ Drugs and Alcohol Policy.
These policies are reviewed regularly.
The board may establish other policies and
practices to ensure it fulfils its functions.
19
NEW ZEALAND OIL & GASNew Zealand Oil & Gas Annual Report 2019 Corporate Governance Statement
Diversity Policy
Diversity 2019
Through its Diversity Policy the company is committed
to an inclusive workplace that embraces diversity.
The Company values, respects and leverages the unique
contributions of people with diverse backgrounds,
experiences and perspectives. Diversity includes, but is
not limited to, gender, age, disability, ethnicity, marital
or family status, religion, sexual orientation, gender
identity and cultural background. The board monitors
the scope and currency of the Diversity Policy.
The policy provides that the Company will recruit
from a diverse pool of candidates, who will be
considered with no conscious or unconscious bias
that may discriminate against certain candidates.
It takes into account the domestic responsibilities
of employees and adopts flexible work practices.
The board establishes measurable objectives
for achieving gender diversity, may establish
measurable objectives for other aspects of
diversity, and will assess annually both the set
objectives and the progress in achieving them.
The Nomination and Remuneration Committee is to
make an annual assessment of success in achieving
and implementing the policy and the set objectives
and report to the board with recommendations.
The board has determined that the Company
has complied with the Diversity Policy.
The Diversity Policy is available in the corporate
governance section of the Company’s website at
www.nzog.com/dmsdocument/291
The following chart shows the number of men
and women across the organisation (excluding
contractors) as at 30 June 2019.
20
5
Board of
Directors
2
2
Officers
4
8
Other
Employees
6
Male
Female
New Zealand Oil & Gas Annual Report 2019
NZX Code Recommendation
✔ ❘ ✗
Explanation of non-compliance
No.
2.1
2.2
2.3
2.4
2.5
2.6
2.7
The board of an issuer should operate under
a written charter which sets out the roles
and responsibilities of the board. The board
charter should clearly distinguish and disclose
the respective roles and responsibilities
of the board and management.
Every issuer should have a procedure
for the nomination and appointment
of directors to the board.
An issuer should enter into written agreements
with each newly appointed director establishing
the terms of their appointment.
Every issuer should disclose information about
each director in its annual report or on its website,
including a profile of experience, length of
service, independence and ownership interests
and director attendance at board meetings.
An issuer should have a written diversity
policy which includes requirements for the
board or a relevant committee of the board
to set measurable objectives for achieving
diversity (which, at a minimum, should
address gender diversity) and to assess
annually both the objectives and the entity’s
progress in achieving them. The issuer should
disclose the policy or a summary of it.
Directors should undertake appropriate
training to remain current on how to best
perform their duties as directors of an issuer.
The board should have a procedure
to regularly assess director, board
and committee performance.
✔
✔
✗
✔
✔
✗
Upon appointment directors are advised of salient requirements.
Obligations such as disclosure of interests, managing conflicts, and
share trading are managed through policies. A majority of the board
are non-independent and governance arrangements reflect this.
Training for directors was not facilitated by the Company
during the reporting period, however the Company has robust
policies around director duties. The Company’s ongoing skills
assessment has determined the board’s skills are appropriate.
✔
The board charter states:
The board shall undertake regular reviews of the operations and
performance of the board, its committees and individual directors.
Where appropriate, the board may engage external consultants to
conduct this review. In addition to compliance with each committee’s
individual charter, the review shall consider:
∫ the skills required by the board, including processes to satisfy
any skill-gaps;
∫ how the required skills are best represented on the board; and
∫ the process for identifying suitable candidates for appointment to
the board.
Reviews are undertaken by way of a questionnaire submitted
to directors. Responses are collated and reviewed by the chair
of the Nominations and Remuneration Committee or delegated
representative. The chair of the Nominations and Remuneration
Committee (or delegated representative) then undertakes an
overall review on the outcomes and produces a written report which
is reviewed by the full board. Individual director performance is
addressed by one-on-one review with the chair of the Nominations
and Remuneration Committee (or delegated representative).
The chair of the board will conduct the review of the chair of the
Nominations and Remuneration Committee.
For this financial year the above process has been followed, led by the
chair of the Nominations and Remuneration Committee.
Two out of seven directors are independent. The board composition
is a consequence of the Company’s ownership structure.
The chair is not independent but the chair
and CEO are different people.
21
2.8
2.8
A majority of the board should be
independent directors.
An issuer should have an independent chair of
the board. If the chair is not independent the
chair and the CEO should be different people.
✗
✔
NEW ZEALAND OIL & GASNew Zealand Oil & Gas Annual Report 2019 Corporate Governance Statement
PRINCIPLE
3
Board
Committees
“The board should use
committees where this will
enhance its effectiveness in key
areas, while still retaining board
responsibility.”
Board Committees
The board has four formally constituted
committees to provide specialist assistance
with defined aspects of governance:
¬ the Audit Committee;
¬ the Commercial Committee;
¬ the Health, Safety, Security, Environment,
Sustainability and Operational Risk
Committee (the HSSE Committee); and
¬ the Nomination and Remuneration Committee
Each committee has a written charter setting
out its roles and responsibilities, which is
available from the Company’s website at
www.nzog.com/investor-information/
corporate-governance
22
Audit Committee
Rebecca DeLaet (Chair)
Rod Ritchie
What the Committee does
Dr Rosalind Archer
The Audit Committee, together with the chief
executive, is responsible to the board for overseeing
the financial and internal controls, financial and other
reporting and audit practices of the Company.
The chair of the Audit Committee also oversees
and authorises any trading in securities by
directors, employees or contractors.
Restrictions on trading are outlined in the Securities
Trading Policy and Guidelines for Directors, and
in the Securities Trading Policy and Guidelines
for Employees and Dedicated Contractors.
Committee meetings
Meetings of the Audit Committee are held at least
twice a year.
The chair of the board, directors, the chief
executive and other staff may be invited by the
Audit Committee to attend these meetings.
The Audit Committee can meet with the external auditors
and senior management in separate sessions. As outlined
in the Audit Committee Charter, there is an annual process
to consider engagement of auditors, having regard to the
auditors’ independence and policies for rotation of partners.
Requirements for the composition of the committee,
and how the requirements are satisfied:
Three non-executive
directors
Majority of members
must be independent
Chair of the board is not
to also be the chair of
the Audit Committee
At least one member is
to have an accounting or
financial background.
Ms DeLaet (Chair), Dr Archer and
Mr Ritchie are non-executive directors
Two of three members of the
committee, Dr Archer and
Mr Ritchie, are independent.
Ms DeLaet is the chair and is
not the chair of the board.
Ms DeLaet has a finance background.
Read the Audit Committee charter here
www.nzog.com/dmsdocument/372
New Zealand Oil & Gas Annual Report 2019
The Nominations and
Remuneration Committee
Dr Rosalind Archer (Chair)
Alastair McGregor
What the Committee does
Samuel Kellner
Rod Ritchie
The Nomination and Remuneration Committee
is responsible to the board for:
¬ providing recommendations to the board
in relation to the director selection and
appointment practices of the Company;
¬ evaluation and remuneration of
directors and board succession;
¬ Chief executive remuneration, appointment,
performance criteria and review;
Reviewing and providing recommendations
to the board in relation to:
¬ senior executive and key staff succession plans;
¬ the Company’s remuneration, recruitment,
retention and termination policies and
procedures for all employees;
¬ implementing the Company’s Diversity Policy and
achieving any associated measurable objectives; and
¬ other relevant matters identified from
time to time by the board.
Committee composition
HSSE Committee
Rod Ritchie (Chair)
Andrew Jefferies
What the Committee does
Dr Rosalind Archer
Alastair McGregor
The HSSE Committee’s role is to advise and support
the board in meeting its responsibilities in relation to
health, safety, security, environment, sustainability,
operational risk and community engagement matters
arising out of the activities and operations of the Group.
The committee’s responsibilities include:
¬ monitoring the performance and effectiveness
of the Company’s Risk Management Framework
and reviews the adequacy of risk controls.
¬ setting and reviewing Health, Safety Security,
Sustainability and Operational Risk (HSSSOR)
policies, practices, frameworks and targets,
including sustainability, engagement, environmental
policies and climate change responses.
¬ seeking assurance of the Company’s compliance
with all HSSSOR legislative requirements, licence
conditions and stakeholder commitments.
¬ defining the Company’s HSSSOR objectives
and monitoring performance.
¬ supporting a culture of continuous improvement
by reviewing significant incidents and
system failures and monitoring actions and
measures to minimise recurrence.
The committee is to comprise at least three non-
executive directors of the board. The chair is to be an
independent director. The chair, Dr Archer, is independent.
¬ ensuring the necessary skills are obtained
and maintained within the Group to
achieve HSSSOR objectives.
The committee meets as required, at least twice
per year, and it may invite executive directors or
management to participate in all or part of meetings.
Read the committee’s charter here
www.nzog.com/dmsdocument/373
¬ providing leadership to the Board and
support the Company in aspiring to
proactively manage HSSSOR issues.
¬ and bringing significant issues to the
attention of the full board.
23
NEW ZEALAND OIL & GASNew Zealand Oil & Gas Annual Report 2019
Corporate Governance Statement
Company policies, frameworks and
strategies relevant to this committee:
¬ Health and Safety Policy
¬ Environment Policy
¬ Capturing Local Economic Benefits Policy
¬ Community Engagement Policy
¬ HSSE Management Framework
and Management System
¬ Risk Register
¬ Risk Management Procedure
¬ Sustainability Framework.
Committee composition
The Committee is to comprise at least
three board members. The chair is to be a
non-executive director, although interim
arrangements may differ from time to time.
Read the committee’s charter here
www.nzog.com/dmsdocument/370
Commercial Committee
Alastair McGregor
Andrew Jefferies
What the Committee does
The committee exists to allow management to bring
commercial opportunities to a state that they can be
brought to the full board for final investment decision.
The committee may approve routine budgets
and contracts, including due diligence budgets,
for such projects and opportunities.
The committee includes, at a minimum, the chief
executive and one director appointed by the board.
Other directors may be invited to join the committee
from time to time with the approval of the board.
The committee meets as required, and generally
resolves its business by email or teleconference.
Read the committee’s charter here
www.nzog.com/investor-information/shareholders-
information/corporate-governance/
Board and Committee meeting attendance
From 1 July 2018 to 30 June 2019.
Director
Samuel Kellner
Dr Rosalind Archer
Marco Argentieri
Rebecca DeLaet
Andrew Jefferies
Alastair McGregor
Rod Ritchie
Board Meeting
Audit Committee
Nominations &
Remuneration
Committee
HSSE Sustainability
and Operational
Risk Committee
4 / 4
4 / 4
4 / 4
4 / 4
4 / 4
4 / 4
4 / 4
2 / 2
2 / 2
2 / 2
2 / 2
3 / 3
3 / 3
3 / 3
3 / 3
1 / 1
1 / 1
1 / 1
1 / 1
The Commercial Committee generally met weekly or twice per week depending on travel arrangements.
24
New Zealand Oil & Gas Annual Report 2019
No.
NZX Code Recommendation
✔ ❘ ✗
Explanation of non-compliance
3.1
3.2
3.3
3.4
3.5
3.6
An issuer’s audit committee should operate under a
written charter. Membership on the audit committee
should be majority independent and comprise solely of
non-executive directors of the issuer. The chair of the audit
committee should not also be the chair of the board.
Employees should only attend audit committee
meetings at the invitation of the audit committee.
An issuer should have a remuneration committee which
operates under a written charter (unless this is carried out
by the whole board). At least a majority of the remuneration
committee should be independent directors. Management
should only attend remuneration committee meetings
at the invitation of the remuneration committee.
An issuer should establish a nomination committee to
recommend director appointments to the board (unless
this is carried out by the whole board), which should
operate under a written charter. At least a majority of the
nomination committee should be independent directors.
An issuer should consider whether it is appropriate to have
any other board committees as standing board committees.
All committees should operate under written charters.
An issuer should identify the members of each of its
committees, and periodically report member attendance.
The board should establish appropriate protocols that
set out the procedure to be followed if there is a takeover
offer for the issuer, including any communication between
insiders and the bidder. The board should disclose the
scope of independence advisory reports to shareholders.
These protocols should include the option of establishing an
independent takeover committee, and the likely composition
and implementation of an independent takeover committee.
✔
✔
✔
✗
✔
✗
Half of the committee is independent, and the
committee is chaired by an independent director.
A majority of the board is not independent and the
composition of the committee also reflects this.
Given the Company’s shareholder structure,
the chance of further takeover proposals in
respect of the Company is extremely low. The
Company and its staff are highly familiar with the
processes and appropriate protocols to follow.
25
NEW ZEALAND OIL & GASNew Zealand Oil & Gas Annual Report 2019 Corporate Governance Statement
PRINCIPLE
4
Reporting &
Disclosure
“The board should demand
integrity in financial and non-
financial reporting, and in the
timeliness and balance of
corporate disclosures.”
The Company is committed to maintaining
a high standard of communication and to
providing timely, full and accurate information
to shareholders and other stakeholders.
The Company is committed to compliance at
all times with its obligations, as an NZX-listed
Company, to provide continuous disclosure to the
market and strives to make those disclosures
in a way that is clear, concise and effective.
26
Communications, Market and
Social Media Disclosure Policy
The Communications, Market Disclosure and
Social Media Policy’s purpose is to:
¬ reinforce the Company’s commitment to the
continuous disclosure obligations imposed
by law and stock exchange rules,
¬ describe the processes to ensure compliance,
¬ outline the Company’s general communications
approach aimed at ensuring timely and accurate
information is provided to shareholders, market
participants and market observers, and
¬ provide ground rules for the use of social media.
The Communications, Market and Social Media
Disclosure Policy is available in the corporate
governance section of the Company’s website at
www.nzog.com/dmsdocument/189
See also Principle 8, Shareholders’ Rights, on Page 36
Reports and policies are easily available
The Company publishes annual, interim, and
quarterly reports. Security holders can elect to
receive the annual and interim reports in printed
or electronic format. Security holders can elect to
receive quarterly reports in electronic format.
These documents are also posted on the Company’s
website in a clearly marked Company Reports section
which is located within the investor section (www.nzog.
today). A link to the latest quarterly and annual reports is
provided prominently on the front page of the website.
The company’s Code of Business Conduct and Ethics,
board and committee charters and the policies
recommended in the NZX Code are published in the
Corporate Governance section of the website
www.nzog.com/investor-information/shareholders-
information/corporate-governance/
New Zealand Oil & Gas Annual Report 2019 Continuous Disclosure
Non-financial reporting
New Zealand Oil & Gas is committed to
meeting the continuous disclosure obligations
required by the Listing Rules.
The Listing Rules contain general and continuous
disclosure requirements based on principles
which encompass investor protection, the
need to protect the reputation of the market
and the interests of listed entities.
The Company immediately releases to the market
information that a reasonable person would expect
to have a material effect on the price of its securities.
The only exceptions to this disclosure principle
are those permitted under the Listing Rules.
The board is responsible for monitoring commitments and
continuous disclosure obligations and initiating action
as warranted to ensure reporting is fair and reasonable.
The chief executive is accountable for
the release of information.
The Company reports on sustainability once per year.
Aspects of sustainability reported include:
¬ a summary of the Company’s values, including
analysis of our performance living up to them;
¬ a summary of the Company’s approach to stakeholder
engagement, including formal feedback from
the Company’s Southern Community Panel;
¬ summary of the Company’s contribution
to local communities;
¬ a materiality matrix.
The Sustainability Framework is shown at page 8.
Regular updates are made to the website
with information about the Company’s
sustainability activities. This is available at
www.nzog.com/sustainability
No.
NZX Code Recommendation
✔ ❘ ✗
Explanation of non-compliance
✔
✔
✔
4.1
4.2
4.3
An issuer’s board should have a written
continuous disclosure policy.
An issuer should make its code of ethics, board and
committee charters and the policies recommended
in the NZX Code, together with any other key
governance documents, available on its website.
Financial reporting should be balanced, clear and objective.
An issuer should provide non financial disclosure at
least annually, including considering material exposure
to environmental, economic and social sustainability
risks and other key risks. It should explain how it plans to
manage those risks and how operational or non-financial
targets are measured. Non-financial reporting should be
informative, include forward-looking assessments, and
align with key strategy and metrics monitored by the board.
27
NEW ZEALAND OIL & GASNew Zealand Oil & Gas Annual Report 2019 Corporate Governance Statement
PRINCIPLE
5
Remuneration
“The remuneration of directors
and executives should be
transparent, fair
and reasonable.”
New Zealand Oil & Gas aims to attract, retain
and motivate professional staff capable of
achieving the goals of the Company.
The Company wants to encourage and reward its
staff fairly and appropriately within the market
to reflect performance and contribution.
Remuneration and Performance
Appraisal Policy
The Remuneration Policy sets out a process to assess
the competitiveness of remuneration level.
The Nomination and Remuneration Committee is responsible
for receiving and making recommendations on remuneration
policies for the chief executive and senior managers
based on assessment of relevant market conditions
and linking remuneration to the Company’s financial and
operational performance and individual performance.
Executive remuneration may comprise salary and short-
term incentive payments (as approved by shareholders).
Director’s Remuneration
At the 2008 Company Annual Meeting, shareholders
approved a resolution that director’s fees be set at a
maximum of $600,000 per annum, being the combined
total for all non-executive directors. There has been no
increase in the fee level since 2008 and in March 2016 the
board and directors volunteered a reduction in their fees.
Directors do not receive any performance-based remuneration.
Mr Jefferies does not receive fees because
he is the chief executive.
28
Directors’ Remuneration
The total remuneration and other benefits to
directors for services in all capacities during
the year ended 30 June 2019 was:
Dr R Archer
Mr M Argentieri
Ms R DeLaet
Mr A Jefferies¹
Mr S Kellner
Mr A McGregor
Mr R Ritchie
$70,000
-
-
$848,096
-
-
$70,000
Mr Kellner, Mr Argentieri, Ms DeLaet, and Mr McGregor have chosen not to
accept payment.
¹ Includes remuneration as chief executive
Directors’ Securities Interests
The interests of directors in securities of
the Company at 30 June 2019 were:
Mr A Jefferies
Direct Interest
Indirect Interest
-
1,130,000 (partly
paid ESOP shares)
Directors’ Interests Policy
The directors are required to recognise that the
possibility of conflict of interest exists, and are
expected to declare potential conflict of interest
situations to the board and manage conflicts of
interest in accordance with the Directors’ Interests
Policy, the Code of Business Conduct and Ethics,
and the Company’s Constitution. The Company
maintains an interests register in compliance with
the Companies Act 1993, which records particulars of
certain transactions and matters involving directors.
The Director’s Interests Policy is available in the corporate
governance section of the Company’s website at
www.nzog.com/dmsdocument/190
New Zealand Oil & Gas Annual Report 2019 Directors’ Interests Register
Mr S Kellner
O.G. Oil & Gas Ltd
Directors’ interests recorded in the Interests
Register of the Company as at 30 June 2019
are detailed below. Each such director will be
regarded as interested in all transactions between
the Company and the disclosed entity.
O.G. Energy Holdings Ltd
Omni Holdings Ltd
Cue Energy Resources Ltd
Mr A McGregor
Omni Offshore
Terminals Pte Ltd
Omni Offshore Terminals
(Operations) Pte Ltd
Omni Offshore Terminals
(Manora) Pte Ltd
Omni Offshore Terminals
(Nong Yao) Pte Ltd
Omni Offshore Terminals
Malaysia Sdn Bhd
Gading Megah Sdn Bhd
Omni Offshore Terminals
(Operations) (Thailand) Co Ltd
Aurora FSO Ltd
Manora FSO Ltd
Omni Holdings Limited
O.G. Oil & Gas
(Singapore) Pte Ltd
O.G. Oil & Gas Ltd
O.G. Energy Holdings Ltd
Cue Energy Resources Ltd
Cue Kalimantan Pte Ltd
OGOG (Kohatukai) Ltd
Mr R Ritchie
Cue Energy Resources Ltd
SPARC NZ consulting
Coromandel Pure Honey
Sparc (Aust) Pty Ltd
SacGasCo
Dr R Archer
Capricorn Solutions Ltd
Director
Engineering New Zealand
Vice President
University of Auckland
Geothermal Institute
Mr M Argentieri
O.G. Energy Holdings Ltd
O.G. Oil & Gas Ltd
Director
Director
Director
OGOG (Otway) Holdings Pty Ltd
Director
OGOG (Otway) Pty Ltd
OGOG (Kohatukai) Ltd
Ms R DeLaet
O.G. Oil & Gas Ltd
O.G. Energy Holdings Ltd
Director
Director
Director
Director
OGOG (Otway) Holdings Pty Ltd
Director
Mr A Jefferies
OGOG (Otway) Pty Ltd
Cue Energy Resources Ltd
Petroleum Exploration and
Production Association
of New Zealand
CGX Energy
PureVida
Petrel
SacGasCo
Director
Director
Director
Shareholder
Shareholder
Shareholder
Shareholder
First Australia Resources
Shareholder
Tuatara Energy Ltd
Director
Cue Energy Resources Ltd
Director &
Shareholder
Cue (Ashmore Cartier) Pty Ltd
Director
Cue Exploration Pty Ltd
Cue Mahakam Hilir Pty Ltd
Cue Mahato Pty Ltd
Cue Sampang Pty Ltd
Cue Taranaki Pty Ltd
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Shareholder
Shareholder
29
NEW ZEALAND OIL & GASNew Zealand Oil & Gas Annual Report 2019 Corporate Governance Statement
Short Term Incentive
Directors’ and Officers’ Liability Insurance
Officers of the company may receive payments
under a short term incentive scheme.
50% of the STI is based on company performance and
50% on personal performance. Half of the personal
performance criteria is determined by behaviours,
and half by performance measures agreed at periodic
intervals throughout the year between the CEO and direct
reports, and between the CEO and the Nominations
and Remunerations committee for his performance.
In 2018-19 the company factors affecting
short term incentive payments were:
Acquisitions
Financial Performance
Reserves Replacement
Exploration
HSSE
37.5%
7.5%
20.0%
15.0%
20.0%
The Company and its subsidiaries have arranged policies
of directors’ and officers’ liability insurance, which,
together with a deed of indemnity, seek to ensure to
the extent permitted by law that directors and officers
will incur no monetary loss as a result of actions
legitimately taken by them as directors and officers.
Chief Executive’s Remuneration
Salary paid
Benefits4
Cash STI5
Total
$587,446
$32,170
$228,480
$848,096
4 Benefits include Kiwisaver at 3%, health insurance and share based
payment costs
5 STI for 2018-19 to be paid August 2019
Employees Remuneration
During the year ended 30 June 2019, 16 New Zealand
Oil & Gas employees (including the chief executive)
received individual remuneration over $100,000.
$100,001- $110,000
$150,001 - $160,000
$180,001 - $190,000
$190,001 - $200,000
$210,001 - $220,000
$220,001 - $230,000
$240,001 - $250,000
$260,001 - $270,000
$310,001 - $320,000
$450,001 - $460,000
$510,001 - $520,000
$840,000 - $850,000
2
3
1
1
1
1
1
1
2
1
1
1
30
New Zealand Oil & Gas Annual Report 2019 Officers’ Securities Interests
ESOP
The interests of the current Company Officers in
securities of the Company at 30 June 2019 were:
No. of shares at -
30 June 2018
30 June 2019
The Company formerly operated an Employee Share
Option Plan (ESOP), under which options to purchase
shares were granted to employees at the discretion
of the board.
Andrew Jefferies
30 ordinary shares
and 1,507,000
unlisted partly
paid shares
1,130,000 unlisted
partly paid shares
Since February 2017 the Company has not allocated
any shares.
Paris Bree
92,000 unlisted
partly paid shares
48,000 unlisted
partly paid shares
Dr Chris McKeown
189,000 unlisted
partly paid shares
95,000 unlisted
partly paid shares
Catherine McKelvey
-
John Pagani
355,000 unlisted
partly paid shares
7,500 directly held
ordinary shares
55,000 unlisted
partly paid shares
and 12,000 directly
held ordinary shares
Michael Wright
367,000 unlisted
partly paid shares
84,000 unlisted
partly paid shares
No.
NZX Code Recommendation
✔ ❘ ✗
Explanation of non-compliance
5.1
5.2
5.3
An issuer should recommend director remuneration
to shareholders for approval in a transparent
manner. Actual director remuneration should be
clearly disclosed in the issuer’s annual report.
An issuer should have a remuneration policy for
remuneration of directors and officers, which
outlines the relative weightings of remuneration
components and relevant performance criteria.
An issuer should disclose the remuneration arrangements
in place for the CEO in its annual report. This should include
disclosure of the base salary, short term incentives
and long term incentives and the performance criteria
used to determine performance based payments.
✔
✔
✔
31
NEW ZEALAND OIL & GASNew Zealand Oil & Gas Annual Report 2019 Corporate Governance Statement
PRINCIPLE
6
Risk
Management
“Directors should have a sound
understanding of the material
risks faced by the issuer and
how to manage them. The Board
should regularly verify that the
issuer has appropriate processes
that identify and manage
potential and material risks.”
Recognising and Managing Risk
The Company has a risk management system
framework, which outlines the Company’s
approach to risk management. It provides a
framework on how to apply consistent and
comprehensive risk management practices across
all functional areas of the Company’s business.
The Risk Management System Framework
is available in the corporate governance
section of the Company’s website at
www.nzog.com/dmsdocument/1
A central Company risk register, which considers
the risks, reviews the controls, assigns ownership
of a risk and tracks treatment plans, is maintained.
Risk assurance is provided through a prioritised
programme of audits and internal review.
The board’s accountabilities include overseeing
the effectiveness of the Risk Management System
framework, monitoring compliance and approving
polices and systems for the ongoing identification and
management of risks. The board’s responsibilities include
approving the Company’s risk capacity and appetite,
reviewing material risks and reviewing the risk register.
The board allocates oversight of risk management
in relation to health, safety and environment and
company operations to the HSSE Committee and
oversight in relation to accounting standards and
principles, financial statement compliance and reliability
and the audit process to the Audit Committee.
32
Responsibility for identifying, documenting and
managing risks and opportunities is delegated to
the appropriate level of management. The chief
executive is responsible for such things as integrating
risk management into core business processes,
managing the Company’s corporate strategic risks
and opportunities, and regularly reviewing the
Company’s risk profile. The chief executive has ultimate
responsibility to the board for design, development
and improvement of the risk management framework
system and maintains the Company’s risk register.
The Company does not have an internal audit
function. The process employed for evaluating and
improving the effectiveness of risk management
and internal control processes is:
¬ risks are formally reviewed by risk owners;
¬ management regularly reviews the risk register to
ensure adherence and continuous improvement;
¬ the HSSE Committee regularly reviews the risk
register, with a particular emphasis on reducing
key risks to as low as reasonably practicable;
¬ for specific operational activities (including seismic
acquisition campaigns), the board reviews the
intended operational activity against activities related
to elements of the Company’s HSSE management
framework to ensure a compliant work programme,
achieving desired objectives safely; and
¬ after action reviews (AAR) of an operational phase of a
project are undertaken by the HSSE Advisor and project
team, to identify improvement in control processes.
The AAR is then reviewed by the HSSE Committee.
The HSSE Committee reviews specific risks at each
meeting of the committee and, at least annually,
reviews the risk register and framework document to
satisfy itself that the system continues to be sound.
The board HSSE Committee charter, is
available in the corporate governance
section of the Company’s website at
www.nzog.com/dmsdocument/370
New Zealand Oil & Gas Annual Report 2019 Health and Safety
Environment
The Company values the environment and is
committed to responsible management practices
that minimise environmental impacts arising from
our activities, using soundly-based science as the
basis for all of our environmental decisions.
All employees, contractors and joint venturers
engaged in activities under the Company’s operational
control are responsible for applying the Environment
Policy. The Company’s managers are responsible for
promoting the policy in non-operated joint ventures.
The full Environment Policy is available
in the corporate governance section
of the Company’s website at
www.nzog.com/dmsdocument/313
The Company is fully committed to the provision of
a safe and healthy work environment. The Company
aspires to a 'no one gets hurt plus no incidents'
standard under its Health and Safety Policy.
All employees, contractors and joint venture
parties engaged in activities under the Company’s
operational control are responsible for the
application of the Health and Safety Policy.
All employees are responsible for taking all
practicable steps to avoid harm being caused to
themselves or to others in the work place. They
must report any potentially hazardous situations,
maintain good housekeeping in all areas and comply
with safe work practices and procedures.
The Company’s managers are responsible
for promoting the Health and Safety Policy
in non-operated joint ventures.
The full Health and Safety Policy is
available in the corporate governance
section of the Company’s website at
www.nzog.com/dmsdocument/314
No.
NZX Code Recommendation
✔ ❘ ✗
Explanation of non-compliance
6.1
6.2
An issuer should have a risk management framework for its
business and the issuer’s board should receive and review
regular reports. An issuer should report the material risks
facing the business and how these are being managed.
An issuer should disclose how it manages its health
and safety risks and should report on its health and
safety risks, performance and management.
✔
✔
33
NEW ZEALAND OIL & GASNew Zealand Oil & Gas Annual Report 2019 Corporate Governance Statement
PRINCIPLE
7
Auditors
“The board should ensure the
quality and independence of the
external audit process.”
Oversight of the Company’s external audit
is the responsibility of the Board Audit
Committee, which also oversees financial and
internal controls and financial reporting.
The external auditor of New Zealand Oil & Gas is KPMG.
The Audit Committee reviewed the appointment
in 2018. A new External Auditor Independence
Policy was adopted by Board in June 2018.
Total fees paid to KPMG in its capacity as
auditor in FY 2019 is $110,000.
Total fees paid to KPMG for other professional
services were $184,000. Other services included:
¬ Tax advice.
¬ Tax compliance.
The NZX and New Zealand Oil & Gas require
rotation of Lead Audit Partners every five years.
In 2019 the lead partner is in his fifth year.
KPMG has supplied the Company with a written
statement confirming its independence, and systems
used to ensure independence is maintained.
34
New Zealand Oil & Gas Annual Report 2019 No.
NZX Code Recommendation
✔ ❘ ✗
Explanation of non-compliance
7.1
The board should establish a framework for
the issuer’s relationship with its external
auditors. This should include procedures:
a)
b)
c)
d)
for sustaining communication with
the issuer’s external auditors;
to ensure that the ability of the external
auditors to carry out their statutory audit
role is not impaired, or could reasonably
be perceived to be impaired;
to address what, if any, services (whether by type
or level) other than their statutory audit roles
may be provided by the auditors to the issuer; and
to provide for the monitoring and approval by
the issuer’s audit committee of any service
provided by the external auditors to the issuer
other than in their statutory audit role.
7.2
The external auditor should attend the issuer’s
Annual Meeting to answer questions from
shareholders in relation to the audit.
7.3
Internal audit functions should be disclosed.
✔
✔
✔
✔
✔
✔
✗
The Company does not have an internal audit function. The
process employed for evaluating and improving the effectiveness
of risk management and internal control processes is:
∫ risks are formally reviewed by risk owners;
∫ management regularly reviews the risk register to
ensure adherence and continuous improvement;
∫ the HSSE Committee regularly reviews the risk
register, with a particular emphasis on reducing
key risks to as low as reasonably practicable;
∫ for specific operational activities (including seismic acquisition
campaigns), the board reviews the intended operational
activity against activities related to elements of the Company’s
HSSE management framework to ensure a compliant work
programme, achieving desired objectives safely; and
∫ after action reviews (AAR) of an operational phase of a
project are undertaken by the HSSE Advisor and project
team, to identify improvement in control processes.
The AAR is then reviewed by the HSSE Committee.
35
NEW ZEALAND OIL & GASNew Zealand Oil & Gas Annual Report 2019 Corporate Governance Statement
PRINCIPLE
8
Shareholder
Rights &
Relations
“The board should respect the
rights of shareholders and foster
constructive relationships with
shareholders that encourage
them to engage with the issuer.”
New Zealand Oil & Gas welcomes shareholder
participation, aims to provide regular updates of
useful information about its activities and seeks
opportunities to engage with shareholders directly.
Shareholder participation
The Company encourages shareholder participation
at the annual meeting by inviting questions in
advance and discussion from the floor. Materials
are posted on the Company’s website.
Shareholders who cannot be physically present can
participate by following the meeting on a live webcast.
Shareholders can directly message at any time through
the website, and the Company aims to respond to queries
within a single working day. For significant events the
company operates a dedicated investor information
line, which can be reached by phone or text message.
Website
The Company maintains a website, nzog.com, where
comprehensive information about its activities is available.
Shareholders and interested parties can
subscribe via the website to receive notice of the
Company’s market announcements by email.
The dedicated investor relations section of the website
makes available share price information, detail about
shareholdings, statutory reports, corporate governance
information and details about the Company’s activities.
No.
NZX Code Recommendation
✔ ❘ ✗
Explanation of non-compliance
8.1
8.2
8.3
8.4
An issuer should have a website where investors
and interested stakeholders can access financial
and operational information and key corporate
governance information about the issuer.
An issuer should allow investors the ability to easily
communicate with the issuer, including providing the option
to receive communications from the issuer electronically.
Shareholders should have the right to vote on
major decisions which may change the nature
of the company in which they are invested.
If seeking additional equity capital, issuers of quoted
equity securities should offer further equity securities
to shareholders of the same class on a pro rata basis,
and on no less favourable terms, before further
equity securities are offered to other investors.
8.5
The board should ensure that the annual shareholders
notice of meeting is posted on the issuer’s website as soon
as possible and at least 28 days prior to the meeting.
✔
✔
✔
✔
✔
36
New Zealand Oil & Gas Annual Report 2019 Shareholder
Information
Stock Exchange Listing
Securities On Issue
The Company’s securities are listed on the Main Board
equity security market operated by NZX Limited.
As at 12 August 2019 New Zealand Oil & Gas
Limited had the following securities:
Listed Ordinary Shares
Unlisted Partly Paid Shares
164,430,718
3,418,000
Top 20 Shareholders As at 12 August 2019
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Security Holder
O.G. Oil And Gas Singapore Pte. Ltd
Accident Compensation Corporation - NZCSD
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