NZOG spuds in at Oi, seeking extended life for Tui

Andrew Knight, New Zealand Oil and Gas Chief Executive
New Zealand Oil and Gas 12-month price history (NZX.com)

Free audio stream, including stories that are padlocked on our site. Listen on any device, anywhere. Updated twice daily. The audio stream takes several seconds to start on Android devices.

Launch Radio player

New Zealand Oil & Gas [NZX: NZO] has started drilling in the Oi prospect in its latest play to extend the life of offshore infrastructure that is servicing the declining Tui oil field.

Situated to the north of Tui in a different geological structure, the Oi prospect has "sufficient estimated potential size to contain commercial amounts of hydrocarbons", with the main uncertainty being whether Kapuni F10 reservoir sands are present.

"NZOG considers the well has a 17 percent geological chance of success, and a 16 percent chance of commercial development."

The well follows the discovery of hydrocarbons in commercial quantities at the Pateke-4H well, drilled earlier this year, which will be tied back to the floating production platform already processing other wells in the Tui prospect.

AWE is the operator on the Oi well, with a 31.25 percent holding, Pan Pacific Petroleum holds 50 percent and NZOG is in at 18.75 percent.  The three joint venture parties hold 57.5 percent, 15 percent and 27.5 percent of the petroleum mining permit that covers both Tui and Oi.

Total cost of the well is US$27 million, of which NZOG's share is US$5million, with potential to drill a sidetrack well on a full equity share basis, should encouraging signs be found in the well currently being drilled.

A pre-drill, unrisked best estimate is for a prospective resource of 11 million barrels of recoverable oil, of which NZOG's share would be 2.06 million barrels.

(BusinessDesk)


Got a question about this story? Leave it in Comments & Questions below.

This article is tagged with the following keywords. Find out more about MyNBR Tags

NZ Market Snapshot

Forex

Sym Price Change
USD 0.6350 -0.0108 -1.67%
AUD 0.8920 -0.0118 -1.31%
EUR 0.5664 -0.0099 -1.72%
GBP 0.4138 -0.0052 -1.24%
HKD 4.9210 -0.0846 -1.69%
JPY 76.9720 -1.3400 -1.71%

Commods

Commodity Price Change Time
Gold Index 1134.7 1.380 2015-08-31T00:
Oil Brent 50.0 7.240 2015-08-28T00:
Oil Nymex 45.2 2.730 2015-08-28T00:
Silver Index 14.5 0.120 2015-08-28T00:

Indices

Symbol Open High Last %
NZX 50 5681.3 5690.4 5670.5 -0.25%
NASDAQ 4798.7 4824.6 4828.3 -1.07%
DAX 10201.0 10273.5 10298.5 -0.38%
DJI 16632.0 16632.0 16643.0 -0.69%
FTSE 6192.0 6247.9 6192.0 0.90%
HKSE 21793.0 21793.0 21612.4 0.27%
NI225 19007.0 19019.6 19136.3 -1.28%