Oil Shows in Pukeko-1

New Zealand Oil & Gas says that over the 390 meters drilled since Friday intermittent minor oil shows have generally been observed. However, over the interval 3910-3917 meters good oil shows were observed in association with a gas peak. Electric logs, which will be run when the well reaches total depth, are needed to evaluate the commercial significance of these shows.

Over the next few days the well will be drilled to total depth and logs run to determine whether producible hydrocarbons are associated with any of the shows seen in the well below 3300m, and particularly those over 3910-3917 meters.

Pukeko-1 appears to provide confirmation of oil charge from the area west of the Maui Field. This is very important as it supports the existence of an oil play fairway in this area which has been a key focus for New Zealand Oil & Gas' exploration effort over the last several years.

While the matter has not been discussed within the Joint Venture yet, New Zealand Oil & Gas believe that the next step will be the acquisition of a substantial 3D seismic program, once all the data from the well has been reviewed. The purpose of 3D seismic will be to fully define for drilling the many prospects and leads recognized in the area. This will supplement the data already acquired in the Tui-Amokura area, where a further two wells will shortly be drilled.

New Zealand Oil & Gas Limited holds a 12.5% interest in PEP38460 through subsidiary Stewart Petroleum Company Limited.

Other participants in the venture are New Zealand Overseas Petroleum Limited (operator) 45%; WM Petroleum Limited (a wholly owned subsidiary of Pan Pacific Petroleum N.L.)10%; AWE New Zealand Pty Ltd 20%; and Mitsui E&P New Zealand Limited 12.5%.