Maari & Tui Partners Obtain Funding for Upcoming Projects

Two partners in the Maari and Tui oil projects in offshore Taranaki have announced funding ahead of final investment decisions, which are due within the next two months for both fields.

Horizon Oil Ltd, a 10% partner in the Maari project, says that BOS International, a subsidiary of the Bank of Scotland, has committed up to US$40 million to fund its share of the project development costs.

The offer is subject to the decision of the joint venture participants to proceed with the Maari development.

The financial investment decision on the $400 million Maari project is scheduled by the end of this month. The 50 million barrel development is operated by Austrian-based OMV New Zealand Ltd.

Horizon Oil's share of technically recoverable P50 oil reserves, in respect of the Maari project, are estimated by the operator of the project to be in the range of 5-6 million barrels.

Meanwhile, Australian Worldwide Exploration Ltd has successfully completed a placement to raise A$120 million for several major projects in Indonesia, Australia, and New Zealand. AWE says that A$14 million of these funds would be used for the Tui development upgrade and A$34 million for accelerated exploration drilling and future growth projects, including projects in the Taranaki and Canterbury basins.

The fund-raising involved a book build with an issue price of A$2.00 per fully paid ordinary AWE share, representing a 7.8% discount to the September 8 closing price. About 60 million shares will be issued under the placement.

AWE also said that all front-end engineering and design work has been completed and tenders received for the Tui Area oil fields development off Taranaki.

A final investment decision for Tui is scheduled to be made by the end of October 2005.

AWE said that capital expenditure on the Tui Area fields in permit PEP 38460 was expected to rise from its previous estimate of US$150 million (about NZ$212 million) and could reach US$203 million with a leased FPSO, or US$220 million (about NZ$311 million) with two additional exploration wells.

The company said the Capex increase was mainly due to increased facility sizing and the proposed project would pay for itself in only three months if oil remained at or above US$50 per barrel.

Gross initial production was forecast to be about 50,000 barrels of oil per day, with total first year production of 7-10 million barrels of oil equivalent but would decline rapidly. First oil from Tui should be flowing from early 2007.

AWE also had another New Zealand project lined up at the Cutter prospect, in offshore Canterbury Basin permit PEP 38259. This could be drilled within the same timeframe, the company said.

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