A total price of US$575,000 (NZ$1m) has been agreed, with payment of 20% of the sum upon completion, and the remainder within 3 months. PEP 38718 and PEP 38728 are subject to the right of pre-emption by the existing permit holders.
PEP 38716, in which Indo-Pacific already holds a 14.05% equity, is adjacent to the prolific Waihapa oil field, and contains the Wingrove-1 well, which flow tested oil at around 60 barrels per day from shallow Mt Messenger sands, in the early 90's. The Waihapa-8 well flow-tested 750 barrels of oil per day from Mt Messenger sands in a western fault block of the Oru Prospect, which lies largely within PEP 38716. In addition, several deeper prospects and leads are identified, including Atarangi and Rawhitiroa, which lie south along trend from Swift's Waihapa oil field.
The Net Revenue Interest in PEP 38738 has considerable value to the Company, given that it is now commencing flow testing of the Cheal-1 well, with a view to commercializing the Cheal gas field in the near future. Several other shallow targets similar to Cheal are identified in PEP 38738. In addition, deep gas potential was identified by the early 90's Cardiff-1 well. The high demand for new gas in New Zealand, and the presence of nearby gas pipeline infrastructure, encourage renewed evaluation of Cardiff and similar structures.
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