It is reported that oil producer New Zealand Oil & Gas Ltd which was the major shareholder and funder for Pike River Coal Ltd has received a USD 5 million payment from receivers of the coal company that was placed in receivership after a tragic accident almost two years ago.

NZOG said a further payment was expected before the end of the year and this was expected to be up to USD 2.5 million. This payment follows sale of Pike River Coal to Solid Energy a deal that was finalized last month.

In addition, Solid Energy will pay a further USD 25 million by installment 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 USD 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 installment based on the relevant coal extraction of the previous 12 months.

Source - nzresources

(www.coalguru.com)