NZ Oil and Gas (NZOG) shares dipped this morning on news that the Kahu-1 exploration well is to be abandoned.After reaching a depth of 3,835m and hitting the target Kahu valley feature, no significant hydrocarbons were found, NZOG announced this morning.
NZ Oil and Gas (NZOG) shares dipped this morning on news that the Kahu-1 exploration well is to be abandoned.
After reaching a depth of 3,835m and hitting the target Kahu valley feature, no significant hydrocarbons were found, NZOG announced this morning. The well will now be plugged and abandoned.
Kahu-1, located three kilometres east of the producing Tui oilfield, is operated by Australian company AWE (42.5%) in partnership with NZ Oil and Gas subsidiary Stewart Petroleum (12.5%), Mitsui E&P Australia (35%) and Pan Pacific Petroleum (10%).
NZOG (NZX:NZO) shares last traded down 2.4% to $1.22.
This is the second disappointment for NZ Oil and Gas in as many months, after the Tui SW-2 offshore well was discovered to lack commercially significant oil accumulation in June.
The Kan Tan IV drilling rig is next headed to drill the Tuatara-1 wildcat exploration well off the top of the South Island, also operated by AWE (65%).
AWE's Tuatara-1 joint venture partners are Australian company Carnarvon, Australian-headquartered ROC Oil and British-listed KEA Petroleum at 10%, 15% and 10% respectively.
The Tuatara-1 well is due to be drilled to a depth of 2000 metres in pursuit of up to 100 million barrels of potential oil reserves.
New joint venture partner Carnavon has estimated the well’s chance of success at a “relatively low risk” 25%.
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