NZOG increases stake in Matuku prospect

18:26, Nov 28 2012

New Zealand Oil & Gas (NZOG) is boosting exploration, buying into three offshore Taranaki permits in a deal with ASX-listed firm Octanex NL.

The deal includes permit 51906, where the prospect known as "Matuku" is expected to be drilled later next year.

This month, Austrian oil giant OMV agreed to pay for the drilling of Matuku-1 late next year. It is estimated to possibly contain up to 65 million barrels of oil.

Permit 51906 is just west of the giant Maui field, north of the Maari field and south of the Tui oilfield, where NZOG's 12.5 per cent share earned the company revenue of $42 million in the last financial year.

For NZOG, it is the third step up in exploration activity off Taranaki announced in recent weeks.

Recently, it announced plans to drill the Kakapo prospect and drilling commitment, and farm out its Kaheru prospect, off the South Taranaki coast.

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In the latest deal, NZOG will pay US$12.5m (NZ$15.2m) for a 12.5 per cent interest in permit 51906.

Octanex will keep 22.5 per cent, and the operator, OMV, has 65 per cent.

NZOG's interest will be fully carried through the first Matuku well. If an appraisal well is drilled at Matuku, NZOG or Octanex can exercise an option to increase NZOG's interest by a further 5 per cent, to 17.5 per cent. NZOG would then pay Octanex's share of the appraisal well, which would then be 17.5 per cent.

NZOG is also taking 50 per cent interests in two other offshore permits, subject to state approval.

Permit 53473 covers 853 square kilometres north of the Tui oilfield. NZOG will pay 75 per cent of the cost of a seismic programme to earn its 50 per cent interest.

Permit 52593 covers 3509 square kilometres. NZOG will pay 60 per cent of the cost of the seismic programme.

Taranaki Daily News