NZOG gets permit extension to potentially massive Barque prospect

New Zealand Oil & Gas has been granted an extension to its Clipper exploration permit for the Barque prospect in the Canterbury Basin, which it says could be bigger than Taranaki's Maui.

The Wellington-based company now has until April 10, 2018 to commit to drilling an exploration well, and until June 10, 2020 to drill the well if it goes ahead with the plan. NZOG estimates the Barque prospect is equivalent to 530 million barrels of oil, at least twice that of the Maui discovery that's been operating since the 1970s.

"The Barque prospect in Clipper is a potential game-changer for the Canterbury region, for New Zealand and for our company," acting chief executive Andrew Jefferies said in a statement. "The government and New Zealand Petroleum & Minerals deserve considerable credit for accommodating a change of conditions to allow further study of this permit, in recognition of its considerable economic potential and the need for further high-quality scientific analysis."

NZOG's permit extension for the Canterbury prospect comes the same day Norway's Statoil pulled out of the Reinga Basin in Northland, saying the chance of striking oil was too low to continue. The local exploration industry has been in a downturn with the collapse in global oil prices, making forays into remote areas such as New Zealand less appealing to major players.

The Wellington exploration company owns 50% of the permit and is in talks with potential farm-in partners with the scale to operate a large deepwater prospect. ASX-listed Beach Energy owns the rest of the permit.

Separately, NZOG said BP acquired an 80% equity interest in a prospect off Western Australia involving Cue Energy Resources, which the New Zealand company controls.

NZOG shares last traded at 52.5c, having gained 24% this year.

(BusinessDesk)