Ocean Patriot to Drill Tap's Well Offshore New Zealand

Diamond Offshore's Ocean Patriot has arrived offshore New Zealand and will soon begin drilling off Wairarapa on the East Coast Basin for Tap Oil. This will make it the second offshore rig to be operating in New Zealand waters.

The Tawatawa-1 well is located in PEP 38333 20 km off the coast, between Castlepoint and Cape Turnagain. This will be the third well to be drilled offshore in the 600 km-long East Coast Basin.

The semisub was towed from South Africa by two rig supply vessels Far Grip and Lady Caroline and passed through Cook Strait and is anchored off Napier for loading of final supplies. The rig is expected to be moved south to the well site in late August to begin drilling at Tawatawa-1.

The other offshore rig currently operating is the Ocean Bounty in Taranaki which drilled the recent Pateke-2 well near the Tui-Amokura oil discoveries in PEP 38460 for operator Transworld. This will be followed by the nearby Kiwi-1 well.

Altogether six offshore wells have been drilled or planned in New Zealand for 2004, a substantial rise on the three wells drilled with offshore rigs in 2003, two in 2002 and none in 2001.

This is the result of increasing interest in offshore petroleum prospects, higher oil and gas prices and the boost given by the Government's recent package of incentives aimed at increasing exploration for gas and oil.

Tap Oil said in its latest quarterly report that it has negotiated to farm down 15% of its earned 50% interest in the Tawatawa-1 well to a yet unnamed partner and will have a final equity of 35% in PEP 38333 permit as well as assuming operatorship. Former operator Westech Energy New Zealand holds a 50% interest.

Tap said the Tawatawa prospect is a four way dip closure of up to 40 sq km with a potential to contain over 1 Tcf of gas, though an oil charge was also possible. The well will be drilled in a water depth of 214 m to approximately 1500 m.

Tap Oil Limited is a Perth-based oil and gas exploration and production company with extensive interests on the North West Shelf of Australia, Onshore Taranaki, Offshore East Coast and the Offshore Canterbury regions of New Zealand.

The well is expected to take between 12 and 20 days to drill, after which the rig will be towed out of the country.

The last well drilled from offshore in the Southern East Coast basin was Titihaoa-1 in 1994, approximately 20 km to the south-east of the Tawatawa-1 site. Titihaoa-1 drilled a separate structure of late Miocene turbidite sandstones and encountered significant gas shows. But the well was not production tested.

The Tap report said that its planned Galleon South-1 well (PEP 38259) in offshore Otago waters in the southern Canterbury Basin was now expected to be drilled in 2005 subject to rig availability and possible farmout. Tap earlier had planned a late 2004 drill date for the well. Re-processing of seismic data in the Galleon South area has been finished and interpretation is nearing completion, the company said.

Meanwhile Tap has taken an interest in its ninth onshore Taranaki exploration permit by taking a 33% interest in Bridge Petroleum Ltd's PEP 38745 permit west of the Mangahewa and McKee fields. Operator Bridge, Westech Energy and Tap will each hold a 33.33% interest.

Tap will also be involved from September in drilling of up to six further Mt Messenger wells in onshore Taranaki.