Mosman Oil and Gas Limited, the New Zealand and Australia focused oil exploration and development company provided an update to shareholders in respect to the Murchison permit offshore New Zealand.
Mosman is progressing with exploration plans to drill on the Company’s 100 percent owned Murchison Permit PEP 57068 in the South Island of New Zealand that contains the existing oil and gas discovery at Blackwater-1. Mosman’s team in New Zealand has now completed another site visit, as a follow up to the April field trip and met with relevant parties in order to advance formal negotiations and contracts with local land owners and authorities with regards to land access contracts and regulatory consents in order to drill.
The Company can now confirm it has determined the preferred drilling location, and obtained New Zealand Petroleum and Minerals (NZPAM) approval to name the well, Te Wiriki-1. The landowner has approved the well location in a flat grazing paddock close to the road. The well is planned as a vertical exploration well with an initial target depth of 3,937 feet (1,200 meters), but will be designed to drill deeper if appropriate. The objective of the well is to determine the presence of hydrocarbons, stratigraphy, seal and reservoir potential of the formations within the Te Wiriki Anticline. The initial target of the Te Wiriki-1 well is the Brunner Sandstone and Coal Measures which are a proven reservoir and source within the Murchison Basin.
An independent technical report by SRK dated April 28 (SRK Report) estimated the conventional prospective oil resources at the Te Wiriki Anticline to be a Pmean of 1.13 million barrels (gross 100 percent for the full structure; where approximately 34 percent of the lowest part of the fault dependent closure extends beyond the block held by Mosman). The SRK Report also identified Pmean tight gas and oil prospective resources of 13,695 billion cubic feet (Bcf) and 164 million barrels respectively (gross 100 percent). It is expected the Te Wiriki-1 well will test the conventional target as well as validate the tight gas potential of the Murchison Permit as a secondary objective.
The estimated well cost, based on a vertical well, is less than $1.0 million (NZD 1.5 million), which includes utilizing the Mosman inventory of casing and materials and existing technical consultants, to reduce costs. The potential drill rig contractor attended the recent site visits and confirmed adequate access and site suitability. Drilling rig contract discussions are underway, and the above costs estimate includes a provision for drill costs based on these discussions.
There are a series of formalities and approvals to be completed before drilling, which is still anticipated in 2015, conditional on a number of matters including funding.
The Chairman of Mosman, John W Barr, said: “The Te Wikiri-1 exploration well is now a priority following completion of a review by our technical team and given, amongst other factors, the existence of an oil and gas discovery at Blackwater-1 as well as oil seeps on the Permit. We are excited about the opportunity to finalize planning for the drilling of the oil prospect on the Te Wiriki Anticline, that will also allow us to confirm the significant tight gas and condensate potential identified on the Permit.”
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