New Zealand Oil & Gas [NZX: NZO], the exploration company, says its total costs for the Pateke-4H prospect in the Tui field off the Taranaki coast will be US$40 million to US$46 million including the tie back to the floating storage/production vessel Umuroa.
Costs of the project include the $25 million for NZOG's share of exploration and drilling. NZOG has 27.5 percent of Tui while operator AWE has 57.5 percent and Pan Pacific Petroleum has 15 percent. The costs "increased beyond the pre-drilling estimate" because of significant extra work to mitigate mechanical difficulties and drill two sidetracks, NZOG said today.
The company's initial evaluation of the resource estimates 2.5 million barrels, of which its share would be 687,500 barrels.
"Preparations are being made to run the completion and suspend the well to enable production in the first quarter of 2015," it said.
Last month, chief executive Andrew Knight told BusinessDesk potential Pateke production would bolster output rather than extend the life of the Tui oilfield.
NZOG's shares gained 1.3 percent to 78.5 cents, and have slipped 3.7 percent this year.