NZOG buys stake in Hoki permit

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New Zealand Oil and Gas Ltd (NZOG) is buying a 10 percent stake in the Hoki oil prospect permit area off the Taranaki coast.

Hoki is the largest untested prospect in the western margin of the Taranaki basin.

"While exploration is always risky, NZOG's internal assessment is that Hoki has the potential to be a large oil-bearing reservoir," said chief executive David Salisbury.

NZOG said the stake purchased from OMV New Zealand Ltd for an undisclosed sum is in permit 38401, 150km northwest of New Plymouth.

The semi-submersible drilling rig Kan Tan IV will drill the Hoki-1 well later this year to test the Island Sandstone reservoir and North Cape formation.

The Kan Tan IV will also drill at least two prospects close to the existing Tui oil fields.

NZOG said it had committed $10 million to the Hoki project.

Operator AWE New Zealand Pty has 50 percent of the project, Todd Petroleum Mining Co Ltd has 18.75 percent and OMV's stake reduces to 21.25 percent.

NZOG now has interests in five permits in the Taranaki Basin and one in the Canterbury Basin.

NZPA