An oil rig in transit off the coast of New Zealand. Credit: C Morrison from Pixabay.

Beach Energy has signed an agreement with OMV GSB to acquire a 30% participating interest in exploration permit (EP) PEP50119 in the Great South Basin, offshore New Zealand.

PEP50119 comprises the undrilled Tawhaki exploration prospect, which has a structural closure area of up to 470km2. It is said to have cretaceous reservoirs of similar features encountered in Caravel-1, about 130km to the north in PEP38264 in which Beach Energy owns 37.5% and operates.

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Beach Energy will acquire the stake in the permit in return for funding a 30% share of the Tawhaki-1 well cost and the associated work programme. The company estimates the net capital exposure to be approximately $25m.

Upon completion of the transaction, Beach Energy will own 30% interest in PEP50119, with operator OMV holding a 52.93% stake. The remaining 17.07% will be held by Mitsui E&P Australia.

Beach Energy CEO Matt Kay said: “After undertaking extensive geological and commercial due diligence, we believe the Tawhaki prospect provides an attractive exploration opportunity.

“Tawhaki is one of three frontier exploration wells Beach will participate in over the next 18 months, the others being Wherry to the north of Tawhaki and Ironbark in the Carnarvon Basin. All three wells have the potential to add material resource volumes to Beach in a success case.”

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Beach Energy and partners expect to drill the Tawhaki-1 well early in the CY2020 using the COSL Prospector rig as part of a OMV-led drilling programme. The transaction is expected to be completed upon approval from New Zealand government and other regulatory bodies.