The transactions, which are subject to regulatory approvals, will result in the following outcome for AWE:
The Forward Work Program
(a) PEP 38483
AWE and the PEP 38483 joint venture participants will acquire approximately 414 square kilometers of 3D seismic over the Hector Prospect Area (see attached map) in April, 2005.
Seismic data processing and its subsequent interpretation will take several months before prospects can be high-graded for drilling. The work will be fast-tracked with a view to drilling later in 2005 or early 2006.
The Hector area is considered to be highly prospective due to a combination of the favourable reservoir development within the Kapuni "F" sand (the same oil-bearing interval as in the Tui area and Maui B oilfields) and the prime location for oil charge from the adjacent Kahurangi Trough. Several "F" sand leads have already been identified on the existing 2D seismic and these are the primary objective of the 3D survey. There is also a large stratigraphic trap within the Kapuni "C" sands which is partly coincident with the deeper "F" sand closures.
(b) PEP 38460
In PEP 38460, a 72 square kilometer extension to the Tui 3D Seismic Survey will be acquired immediately before the Hector 3D Seismic Survey. This will be managed by AWE on behalf of the Operator NZ Overseas Petroleum and is expected to be acquired in late March.
The purpose of the Tui 3D Extension will be to fully define the extent of the Pateke oil discovery, which was made in 2004 by the Pateke-2 well.
This work will be conducted in parallel with the Front End Engineering Design work for the development of the Tui area oil fields previously announced.
Commenting on the announcement, AWE's Managing Director Mr Bruce Phillips said:
"Since AWE's IPO over 7 years ago we have been positioning the company to gain greater participation in the most exciting exploration plays in New Zealand. This transaction is a positive step in that direction.
"The recent announcement about progress on the Tui Area oil field developments has enhanced our view on the commercial attractiveness of exploration and development opportunities in New Zealand. It is with this view in mind that, subject to regulatory approvals, we intend to increase our participation in exploration with an accelerated programme including the acquisition of a major 3D seismic survey, and if justified, exploration drilling in PEP 38483 later in 2005.
"This programme will be in addition to the significant program currently envisaged for the adjacent PEP 38460 (Tui) area."
Equities in the two Taranaki Basin blocks upon satisfaction of various conditions, including government approvals, will be:
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