New Zealand Oil & Gas is ramping up spending in exploration and evaluation as it looks to find replacements for its Kupe and Tui oil and gas fields.
The Wellington-based company spent $25 million on exploration and evaluation in the three months ended March 31, according to its quarterly cash flow report. Both its Tui oil field and Kupe oil and gas fields are in decline as the company looks for alternative sites.
The Pateke exploration well, which falls in the Tui permit zone, is thought to have 2.5 million barrels of oil, the company said. If Pateke production went ahead it would "bolster output rather than changing the end date" of the Tui field, said Andrew Knight chief executive.
"It has oil in it which appears to have the same characteristics as discoveries nearby elsewhere in the Tui permit and we are cautiously optimistic it will get to the point where we complete drilling (and) we will be able to develop it," Knight said.
NZOG has a 28 percent stake in the Tui field, with Australian-based operator AWE holding about 58 percent.
NZOG's share in Tui's oil production increased to 93,330 barrels in the quarter, from 43,622 barrels in the same period a year earlier, as the company took a greater stake in the field. Kupe's gas and oil production recovered in the quarter after a shutdown in operations in the comparable period.
Both Tui and Kupe recorded a drop in quarterly revenue for the company, reflecting the timing of shipment arrivals which have been reduced as the operations produce less, chief financial officer Andre Gaylard said.
Offshore exploration in the Canterbury Great South Basin continued. NZOG also holds exploration permits in Indonesia and Tunisia.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Brexit: the day after
- Three reasons Brexit won
- MARKET CLOSE: NZ shares dip after Brexit vote; Xero, A2, banks hit hard
- RAW DATA: Patrick Gower interviews former Tony Blair spin doctor Alastair Campbell about the Brexit result
- NZ dollar, swaps tumble as Brexit confounds pollsters; central banks likely to act
Most listened to
- Business Week in Review with Grant Walker & Andrew Patterson
- The kiwi dollar has spiked against the pound in one of the biggest one day currency moves in history. NBR’s Jason Walls breaks down the dollar’s movement
- What Brexit now means for NZ, with NZIER John Ballingall
- Dr Oliver Hartwich says everyone should stay calm and carry on
- Matthew Hooton on making a moral case for social capital