New Zealand Oil and Gas is hoping to buy some oil or gas producing assets this year. The company says the market is currently under-valuing such assets.
Speaking after its annual shareholders' meeting yesterday, chairman Peter Griffiths said his company is actively looking for acquisitions.
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The company plans to return $60 million, or 15 cents per share, in capital to shareholders because it has no debt and expects a further cash inflow from Tui oil field sales.
However, it would cease paying dividends in the short-term because it can't deliver tax benefits. The company is not paying tax at the moment because its exploration expenses are immediately tax deductable.
Mr Griffiths said the capital return is not a replacement for dividends.