In this program, AWE will participate in nine wells in New Zealand and a further three wells in Australia. The drilling activity will commence in the third quarter of this year and extend through to the end of 2007.
The expanded program includes:
Well Name Basin and Permit Operator AWE Equity Planned Timing* Cutter-1 Canterbury PEP 38259 Tap Oil 25% Q3, 2006 Hector-1 Taranaki PEP 38483 AWE 44.317% Q4, 2006 Tui Area Development (4 wells) Taranaki PMP 38158 AWE 42.5% from Q4, 2006 to Q1 2007 Tieke-1 Taranaki PMP 38158 AWE 42.5% Q2, 2007 Taranui-1 Taranaki PMP 38158 AWE 42.5% Q2, 2007 West Cape-1 Taranaki PEP 38481 AWE 40.0% Q2, 2007 Henry-2 Otway VIC/P 44 Santos 25.0% from H2, 2007 Netherby-1 Otway VIC/P 44 Santos 25.0% from H2, 2007 Pecten East-1 Otway VIC/P 44 Santos 25.0% from H2, 2007 * Well timing is estimated, and subject to confirmation.
The expanded drilling program will be conducted in two of AWE's key cornerstone asset areas: the Taranaki Basin and the Otway Basin. The company will retain a high level of equity in the program, following the recent acquisition of New Zealand Overseas Petroleum. The acquisition included an increased exposure to the Tui Area oil development and the nearby exploration prospects. AWE will operate eight of the 12 wells in this near-continuous drilling program.
AWE notes that the exploration program will retain some added flexibility to allow for additional drilling in the committed time frame. This will allow some limited appraisal activity in the event of a discovery.
Bruce Phillips, AWEs managing director, said the company is embarking on the largest drilling campaign in its history. The program thus constitutes a significant investment in the company's future growth.
"The environment for offshore drilling rigs has changed dramatically recently and long commitment times are now becoming a reality in this industry segment," said Phillips. "In the increasingly competitive drilling market, we are very happy to commit to the services of the Ocean Patriot which will ensure that AWE and its shareholders gain exposure to a very substantial exploration and development program from 2006 through to the end of 2007." Phillips said that AWE's drilling is targeting organic growth opportunities in two of its four cornerstone asset areas--the Taranaki Basin in New Zealand and the Otway Basin in southeast Australia. "This activity will also be preceded by the drilling of two to three exploration wells in the next quarter in another of our cornerstone areas, the Perth Basin in Western Australia," he said. "We look forward with considerable optimism for these campaigns."
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