New Zealand Oil & Gas is taking a 60% interest in the "highly prospective" Kaheru onshore prospect in Taranaki, partnering with Canadian producer TAG Oil as it seeks to assemble a suite of drilling options to attract a drilling partner.
BUSINESSDESK: New Zealand Oil & Gas is taking a 60% interest in the "highly prospective" Kaheru onshore prospect in Taranaki, partnering with Canadian producer TAG Oil as it seeks to assemble a suite of drilling options to attract a drilling partner to New Zealand in 2013 or 2014.
NZOG also has prospects in the adjacent Kakapo offshore Taranaki licence area, the Kanuka block in the northern Taranaki bight and the Barque prospect in deep water off the Canterbury coast.
It will have operator status on the licence after taking up its share of the stake being abandoned by Roc Oil and L&M Energy.
The increased interest was always anticipated as part of the departure by Roc and L&M, and has given NZOG a low-cost entry, at $US3 million, into an exploration-ready prospect, for which it will seek at least one more farm-in partner.
The increase at Kaheru is conditional on New Zealand's oil and gas sector regulator agreeing to extend the terms of the existing licence to permit drilling until September 18, with a well to be drilled by May 18, 2014.
NZOG initially bought into the licence by buying the 15% interest owned by Australian energy company AGL Upstream Gas.
"These arrangements have breathed new life into Kaheru with minimal cost exposure to NZOG," chief executive Andrew Knight said.
He told BusinessDesk the company wants to create a three-to-four -well drilling opportunity to entice further partners and to justify the cost and difficulty of bringing a drilling rig to New Zealand in late 2013 and 2014.
NZOG holds 90% in the Kakapo prospect, with the remainder held by Raisama, shares 50/50 in the Kanuka prospect with Todd Energy, and holds the operator's licence for Barque, with a 40% stake and involvement by Beach Energy and AWE.
