NZOG to drill Kakapo prospect – needs rig, farm-in partner
"This is a significant step forward for NZOG. They said they would resume a NZ campaign and they have."Featured comment
BUSINESSDESK: New Zealand Oil & Gas has confirmed it will drill inshore Taranaki oil and gas prospect Kakapo but is still looking for at least one more farm-in partner and a suitable drilling rig.
NZOG holds a 90% interest in the Kakapo prospect, with the remainder held by ASX-listed Raisama, and faced a "drill or drop decision" this month.
The company reported in May it was looking for partners and a rig to run a three- to four-well campaign in 2013 and 2014, to include exploration in two other Taranaki prospects: Kaheru and Kanaka.
It has since dropped its option also to drill the deep-water Barque prospect, off the Canterbury coast.
NZOG shares 50:50 in the Kanuka prospect with Todd Energy, and a 60% interest in Kaheru, in partnership with TAG Oil. Raisama will pay 20% of first well costs at Kakapo, estimated at between $US25 million and $US30 million.
"We have made this commitment in the confident expectation that additional partners will join the venture ahead of drilling," chief executive Andrew Knight says in a statement to the NZX.
The NZOG share price has fallen from a high point in the last month of 92 cents to 80 cents on September 21 before rebounding slightly. It was trading down 0.6% at 82 cents immediately after today's announcement.
"The prospect looks attractive as part of a portfolio of opportunities for new entrants to New Zealand," Mr Knight says. It expects to confirm rig arrangements in the next six months.
Work to date on Kakapo suggests "most likely" (P50) reserves of 41 million barrels of oil, and less certain reserves at the P10 level could run to several hundred million barrels.
"NZOG has assessed the potential for Kakapo to be several times the size of the Tui or Maari fields," Mr Knight says. "This has the potential to make a considerable contribution to our community and the New Zealand economy."