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BUSINESSDESK: New Zealand Oil & Gas has farmed out a 25% stake in its Kaheru prospect off the South Taranaki coast to ASX-listed Beach Energy for $US3 million.
The Wellington-based company will keep 35% of the permit, with Beach holding 25% and Tag Oil 40%, it says in a statement.
NZOG is the operator of the exploration permit. The deal is subject to ministerial consent and will see Beach take on a quarter of future joint venture costs and pay the first $US3 million of NZOG's bill.
"The Kaheru prospect fits well into NZOG's portfolio as it provides an exposure to an untested extension of the proven reservoirs of the eastern Taranaki region," chief executive Andrew Knight says.
"Beach is a strong exploration company. Its investment in the project is a demonstration of confidence in a prospect that NZOG is enthusiastic about."
The mean recoverable reserves in the prospect are estimated to be some 45 million barrels of oil in an oil case, or 200 billion cubic feet of gas and 7.5 million barrels of condensate in a gas case.
NZOG's shares (NZX: NZO) were down half a cent to 86 cents today, and Beach stock rose 1.5% to $A1.37 on the ASX.