TAG Oil has firmed up plans to start exploratory drilling for oil and gas in shale deposits on the east coast of the North Island, which it says could hold the equivalent of 14 billion barrels of oil.
All four wells will be drilled using "conventional vertical drilling techniques", the company says in a statement. A spokesman confirmed there was no hydraulic fracturing, or "fracking", planned for any of the four wells.
Drilling is scheduled for March or April this year.
However, it was possible two of 13 wells being drilled onshore in the Taranaki province over the next year could be fracked.
Fracking is more commonly used when creating production wells rather than during exploration.
At this stage, no commercial oil and gas production has ever occurred in the Hawke's Bay and Gisborne regions, where Canada-based TAG held exploration acreage with a larger company, Apache Corp of Texas, before Apache pulled out of the east coast tenements early in the New Year.
TAG will fund the wells using a one-off payment Apache made to honour its commitments to the development plan it had agreed with TAG before deciding to focus its activities in other parts of the world.
The exploration wells will test "several high-impact play Whangai source rocks" which had been independently confirmed as oil-bearing.
"These naturally fractured, high-quality source rocks are believed to be widespread across TAG's acreage," says chief executive Garth Johnson.
"Independent assessments have concluded that there are approximately 14 billion barrels of undiscovered original oil in place potentially, within less than a fifth of TAG's total land holdings on the east coast."