NZOG Takes Stake in Taranaki Basin Permit

26 August 2009 (Last Updated August 26th, 2009 18:30)

New Zealand Oil & Gas (NZOG) has extended its offshore drilling programme by entering into an agreement to acquire a 40% stake in a permit in the northern Taranaki Basin off New Zealand’s coast. NZOG will buy its share in the permit PEP 38491, which covers an area of 715km², f

New Zealand Oil & Gas (NZOG) has extended its offshore drilling programme by entering into an agreement to acquire a 40% stake in a permit in the northern Taranaki Basin off New Zealand’s coast.

NZOG will buy its share in the permit PEP 38491, which covers an area of 715km², from Westch, a wholly owned subsidiary of Energy Corporation of America.

After the transaction Westch interest will be reduced to 50%, with the remaining 10% held by the state-owned enterprise Mighty River Power.

The area is known to have a number of identified prospects, and preparations are already in place to drill one, called Albacore.

NZOG CEO David Salisbury said that the permit was another exciting addition to the company’s expanding exploration portfolio.

"Our assessment is that the central northern Taranaki Basin is a very prospective part of the Taranaki Basin,” Salisbury said.

“The first prospect to be targeted is Albacore, which contains three separate target zones that may contain hydrocarbons.”

NZOG will participate in the NZ$20-25m drilling programme of the Albacore-1 exploration well later this year, targeting structures recently defined by 3D seismic at depths of 1,400 to 1,800m.

“The well will need to be drilled to determine whether hydrocarbons have been trapped in any of the identified structures. However, the potential is significant. NZOG's internal analysis is that Albacore is more likely to contain oil than gas and, if successful, could support an offshore development similar to Tui," Salisbury said.