NZOG Seeks Partners for 4 Exploration Permits in Taranaki Basin

Independent exploration and production company New Zealand Oil & Gas Ltd announced Monday that a global marketing campaign is underway to attract exploration partners into four petroleum exploration permits in the offshore Taranaki basin of New Zealand.

New Zealand Oil & Gas is looking to capitalize on an all time high in New Zealand exploration activity. The Noble Bob Douglas (UDW drillship), Kan Tan IV (mid-water semisub), and Ensco 107 (400' ILC) jackup will drill over a dozen wells in New Zealand in the coming year. They include Matuki-1, Oi-1 and Pateke-4H which are targeting nearly 80 million barrels of oil (gross) for NZ Oil & Gas and its partners.

New Zealand Oil & Gas Chief Executive Andrew Knight said New Zealand exploration opportunities have never been so high on the agenda for global exploration companies looking for high quality, high-impact opportunities. “Our New Zealand 2014 portfolio offers new entrants to New Zealand a rapid country entry package.”

The permits in the New Zealand 2014 portfolio contain a balance of scales, water depths and risk/reward levels, and offer a range of timing for potential drilling and for multi-scaled oil or gas developments.

New Zealand Oil & Gas is representing the interests of four separate exploration joint ventures and three separate joint venture parties.

In all but one, New Zealand Oil & Gas is the operator. Knight said that as New Zealand’s largest listed explorer it is recognized as the partner of choice for exploration in New Zealand. “While we can offer operatorship in the permits, partners are also recognizing we bring technical capability, relations with New Zealanders in the community and in government, and our New Zealand values in everything we do. We are a nation of explorers.”

The marketing campaign for the New Zealand 2014 Portfolio will use a global exploration opportunity marketing service based in London. Outlines of the opportunities in the portfolio are attached below. Suitably qualified, interested companies are invited to express their interest in the opportunities direct to New Zealand Oil & Gas.

Interest can be expressed online at nzog.com/2014offer.

Opportunity Snapshots

PEP 53473 (Takapou)

NZOG: 50 percent (Operator), Octanex 50 percent

  • This 329.3 square miles (853 square kilometers) permit is in relatively shallow water 393.7 feet - 442.9 feet (120 meters - 135 meters), immediately adjacent to the Tui oil fields (P50 Estimated Ultimate Recovery (EUR) of 41 million barrels of oil), which produce from the same Paleocene age “F” Sands prognosed for the permit. The Tui “F” Sands have excellent reservoir properties (initial production rates of up to 45,000 barrels per day)
  • The permit is covered by a dense grid of re-processed and re-mapped 2D seismic data
  • In early 2013 a 229.7 square miles (595 square kilometers) 3D seismic survey was acquired over the Kokako, Toutouwai and Riroriro leads. Processing is close to completion, with the fully interpreted and mapped volume available in November 2013
  • The primary target, Kokako, is believed to be analogous to the Oi Kapuni Group, Farewell Formation (“F” Sand) oil prospect that the Tui joint venture is drilling in their adjacent permit
  • 2D interpretation defined three structures with total area of ~49.4 square miles (~128 square kilometers) and average vertical relief of 114.8 feet (35 meters)
  • Kokako has in-place estimated potential hydrocarbon volumes (prior to re-evaluation of the new 3D seismic data) of up to 81 million barrels (high case)
  • The Toutouwai and Riroriro leads provide attractive upside potential in the permit. The combined potential in-place hydrocarbons within these secondary leads are estimated to be up to 306 million barrels (high case), subject to the results of the re-mapping (using the new 3D) that is on-going
  • The permit is in good standing with a commitment to drill due in March 2014
  • A suitable semisub is in New Zealand waters now and could be used to drill Kokako-1 in 2014
  • New Zealand Oil & Gas and Octanex are offering significant equity and operatorship in return for a cash consideration and promoted contribution to drilling costs

PEP 52593 (Taranga)

NZOG: 50 percent (Operator), Octanex 50 percent

  • This 1,354.8 square miles (3,509 square kilometers) permit is immediately north of PEP 53473 (Takapou) and north of the producing Tui oil fields in 442.9-492.1 feet (135-150 meters) of water and 46.6 miles (75 kilometers) from shore
  • In early 2013 a 115 square miles (298 square kilometers) 3D seismic survey was acquired over the Karoro lead, which was previously identified on reprocessed 2D seismic data
  • Processing of the new 3D is close to completion, with the fully interpreted and mapped volume available in November 2013
  • Karoro has been mapped on 2D seismic as a potential anticlinal depth closure at the Late Cretaceous “North Cape” Formation reservoir level
  • Karoro has an area of ~7.3 square miles (~19 square kilometers) with in-place estimated potential hydrocarbon volumes (prior to re-evaluation of the new 3D seismic data) of up to 140 million barrels (high case)
  • In addition to Karoro there are several other follow up leads in the permit, including the large North Cape Formation onlap feature, Lead “F”, and the basement drapes encapsulated by the “Cetus” lead. These follow up targets are not the current focus of the permit work program but provide exploration running room for future exploration in the permit
  • The permit is in good standing with a commitment to drill due in March 2014
  • A suitable semisub is in New Zealand waters now and could be used to drill Karoro-1 in 2014
  • New Zealand Oil & Gas and Octanex are offering significant equity and operatorship in return for a cash consideration and promoted contribution to drilling costs

PEP 51558 (Kanuka)

NZOG: 50 percent, Todd Energy: 50 percent (Operator)

  • This 1,100.3 square miles (2,850 square kilometers) permit is in the northern offshore Taranaki basin, west of the Pohokura gas/condensate field (P50 EUR: 1 trillion cubic feet (tcf), & 63 million barrels), northeast of the Maui gas/condensate field (P50 EUR: 3.7 tcf & 164 million barrels) and to the north east of the Tui oil fields (P50 EUR: 41 million barrels)
  • The permit contains multiple prospects and leads in two key fairways: the Western Taranaki Rift Flank play (multiple stacked Pliocene to Upper Eocene turbidite sandstone reservoirs) and the Arawa Ridge play (Cretaceous and Paleocene sand reservoirs)
  • Interpretation and mapping of reprocessed 3D seismic and advanced geophysical analysis and structural modelling have been undertaken to refine the evaluation of the extensive prospect portfolio
  • The operator has determined that the permit holds the potential to contain unrisked in-place hydrocarbon volumes of up to 500 million barrels in multiple reservoir units within the early Pliocene
  • The key target, the Pliocene “Mensa” prospect, displays seismic amplitude anomalies that conform to structure on multiple levels. The operator indicates a mid-range estimate of recoverable resources of over 100 million barrels of oil
  • Follow up targets in this very large permit could total up to 1.2 tcf of gas (and associated condensate)
  • The permit is in good standing with a commitment to drill due in December 2013
  • New Zealand Oil & Gas and Todd are offering significant equity and operatorship in return for a cash consideration and promoted contribution to drilling costs

PEP 52181 (Kaheru)

NZOG: 35 percent (Operator), TAG Oil: 40 percent, Beach Energy: 25 percent

  • The Kaheru prospect lies in 82 feet (25 meters) of water, 4.9 miles (8 kilometers) from shore to the east of the Kupe Field (P50 EUR: 323 billion cubic feet (bcf), 18.3 million barrels and 1,368 kiloton (kT) liquefied petroleum gas (LPG) in an exploration permit which covers 120.4 square miles (312 square kilometers)
  • Kaheru is located on a prolific hydrocarbon trend, with multiple oil and gas fields located to the north, with the closest of those being the Kauri, Rimu & Manutahi fields ~6.2 miles (~10 kilometers) away (P50 EUR: 40 bcf and 1.7 million barrels)
  • Multiple reservoir targets are identified and have been significantly de-risked following extensive study
  • The Kaheru prospect is a long-recognised structure with the potential to extend the producing trend southward
  • Advanced reprocessing of existing 3D seismic and multiple technical studies undertaken by the joint venture has enhanced the structural imaging
  • Mean recoverable resources (unrisked) for the primary target are currently estimated at 45 million barrels of oil in an oil case; or 200 bcf of gas and 7.5 million barrels of condensate in a gas case
  • Following the successful farm-out to Beach Energy by New Zealand Oil & Gas, a drilling commitment was made to the New Zealand government in October 2012
  • Planning is underway for an exploration well to be drilled in the Kaheru prospect using a jackup (2014/2015). A suitable drilling rig will be New Zealand waters from 2014 onwards
  • New Zealand Oil & Gas and TAG are offering a combined equity of up to 25 percent in return for a promoted contribution to drilling costs. Operatorship can also be made available to the right party


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