New Zealand Oil & Gas shareholders may have to wait till summer 2013/14 before the company drills its next exploration well in Taranaki.

The next well will probably be NZOG's offshore Kakapo prospect, which could be several times the size of the Tui or Maari fields. NZOG must decide to "drill or drop" Kakapo and another prospect, Kaheru, in September.

It has been two years since NZOG actually drilled a new well, though it has plans for two wells in Indonesia later this year, and all going to plan, a field could be developed in Tunisia in 2014.

Kakapo could be one of up to 11 wells to be drilled by various groups in a rig consortium, including NZOG, in New Zealand. But more likely a drilling rig would drill between five and seven offshore Taranaki wells.

Some players were “very keen” to get a rig to New Zealand for this coming summer rather than the next.

But NZOG chief executive Andrew Knight said yesterday that would be “challenging” given present high demand and rising prices for rigs around the world.

The Kakapo well could cost between US$15 million and US$25m, a modest amount for a well in shallow water.

Kakapo, off the south Taranaki Coast, would be drilled in water of 98 metres. Kaheru is in just 25 metres so is seen as less likely to be drilled, given the size of rig needed for Kakapo and other wells.

NZOG has been trying for five months to "farm out" interests in Kakapo, Kaheru and the Canterbury basin offshore permit Barque, seeking to bring in new partners to help pay for exploration and reducing NZOG's risks.

There had been “strong interest”, and NZOG hopes to make an announcement on farmouts early next quarter.

While shareholders will be kept waiting for perhaps another 18 months for exploration action in New Zealand, they can expect a sweetener in the meantime. NZOG says it expects its annual profits to be announced on August 22 would support a dividend of 6 cents a share.

In its June quarterly report out yesterday, NZOG said its offshore Taranaki Kupe gas and Tui oil fields continued to “perform strongly” in the June quarter. NZOG has 15 per cent of Kupe and 12.5 per cent of Tui.

Daily production from the Kupe gas and oil field was up slightly in the quarter, with total revenue in the three months hitting $20.8m from gas, lpg and light oil.

- © Fairfax NZ News