New Zealand Oil & Gas - the majority shareholder in Pike River Coal - has accomplished only 10% of a share buy-back programme, but appears set to continue with its share price subdued.
On September 17, NZOG announced it intended buying back 8.5 million of its shares between then and this June and would cancel them, but despite 20 buy-back notices since September, it has bought only about 10% of the 8.5 million to date - 826,000 shares worth a total $926,000 at an average price of $1.12.
The buy-back programme covers a 10-month period to the end of June.
Craigs Investment Partners broker Chris Timms said unless NZOG's share price rallied, it was likely to continue the buy-back programme, which was "positive and good news" for shareholders.
"If the share price continues to trade at a subdued level, below their [perceived] fair value, they will likely continue to buy," Mr Timms said.
Before the Pike River tragedy on November 19, which killed 29 men, NZOG's shares were trading at about $1.25, but most recently have been about 88c.
"Management see there is still value in the company.
"The buy-back is a positive move and shareholders should take heart from that," Mr Timms said.
There were 16 buy-backs before the disaster and four afterwards, with the latest announced on Thursday.
Mr Timms said about a third of total shares bought so far were after the November disaster.
In low trading in NZOG shares on Thursday, about 25% of those were from the latest NZOG buy-back.
NZOG management said at the time of the first buy-back: "The NZOG board is of the view that the current share price [which was about $1.25] is significantly below fair value and doesn't reflect a reasonable current valuation of the company, even without taking into account the growth prospects about which the board and management are confident."
The planned buy-backs and subsequent cancellation of shares was in order to "provide a return to shareholders, in excess of NZOG's cost of capital".
On December 22, 23 and 24 and Thursday, NZOG had bought back a total 280,000 shares, with all four purchases described as part of its "capital management".
Pike River, which was spun off by NZOG in May 2007 with a $85 million float and listing on the New Zealand stock exchange, subsequently spent about $300 million over 10 years to get to production.
It managed to get two shipments of its specialist hard coking coal exported from Christchurch, with a total value of about $9 million before disaster struck.
Pike River was placed in receivership on December 13.
At the time, NZOG chief executive David Salisbury said it was evident that it would be an extended period before any resumption of mining could be contemplated, and with Pike River rapidly facing insolvency, receivership was an unavoidable step.
