OG Oil & Gas is already the largest shareholder of NZOG but now intends to acquire the entire company.
Then, NZOG unanimously backed OGOG's increased takeover offer by 1cps in a battle between the large conglomerate and Zeta Energy, despite the latter promising better shareholder returns.
Its latest offer is to buy the remaining shares for NZ62 cents per share, a 25.3% premium to NZOG's closing price yesterday, and a 27.3% premium to the volume weighted average over the last six months.
This morning the board of NZOG unanimously recommended shareholders vote in favour of the transaction, subject to the offer price being within or above the valuation range specified by an independent adviser, and in the absence of a superior proposal.
"The attractive premium offered by OGOG comes despite an uncertain future for oil and gas investment in New Zealand," NZOG's committee of independent directors said.
"Departures by major international players continue, with recent decisions by international companies to surrender exploration acreage being the latest examples."
Last month Chevron Corporation and Equinor both followed in Shell's footsteps abandoning interests in three permits in New Zealand.
Shareholders will be given the opportunity to vote on the takeover at a special shareholder meeting, which will be held in September and if approved the scheme is expected to close by the end of November.
OGOG chief Alastair McGregor said the takeover would offer shareholders "certainty" in a challenging environment for New Zealand oilers.
"We want to increase our investment in the company and believe that acquiring it 100% is the best option for New Zealand Oil & Gas, providing shareholders with an opportunity to realise substantial value for their shares," McGregor said.
NZOG holds the offshore Barque prospect, which consultant Martin Jenkins in 2017 suggested could offer the nation up the NZ$15 billion in GDP and $32 billion in royalties.
Barque is in the Clipper joint venture which is equally shared by NZOG and Beach Energy in Canterbury basin, about 60 kilometres east of South Island's Oamaru in about 800m of water.
The prospect is big enough to double the nation's oil and gas production, Martin Jenkins suggested and development would not be affected by the changes by the Labour government.
During the scheme of arrangement, NZOG is being advised by Clare Capital as financial advisor and Simpson Grierson as legal advisor.
According to NZOG's March quarterly the company had NZ$98 million (A$93.4 million) cash in the bank.
NZOG has a 15% interest in the Ironbark prospect in WA-359P in Western Australia it shares with Beach Energy, junior Cue Energy and operator BP.
OGOG also took a 40% share of Beach's Otway Basin assets offshore Victoria for $340 million and the two plan a drilling campaign soon, submitting an environmental plan to regulator the National Offshore Petroleum Safety and Environmental Management Authority recently.
Despite the vote of confidence from OGOG the outlook for Kiwi oilers remains bleak.
The Jacinda Ardern-led Labour government's decision to limit onshore exploration to the Taranaki Basin, and ban new offshore exploration made a major dent in business confidence, according the New Zealand National Opposition and the industry peak body.
Earlier this month the NZ Institute of Economic Research released its Quarterly Survey of Business Opinion report, which showed business confidence at its lowest level in over a decade.
On the back of the survey release, the Nationals have blamed the Ardern government's attitude towards oil and gas exploration and development as a major factor in the country's financial performance.
"There was definitely a blow to business confidence as a result, and it's raised genuine concerns about New Zealand's energy security and future gas supplies," PEPANZ chief executive Cameron Madgwick told Energy News.
PEPANZ is the nation's petroleum industry body, similar to Australia's APPEA.