Mitsui Takes Stake in PEP 38483 Offshore New Zealand

Japanese-based exploration and production company Mitsui E&P New Zealand Ltd plans to take a larger stake in the West Maui oil fairway in offshore Taranaki.

Australian Worldwide Exploration, which is operator of PEP 38483 through its wholly-owned subsidiary AWE New Zealand Pty Ltd (AWE), said its alliance partner Mitsui would farm in for a 22.73% interest in the permit for a partial financial carry through a major 3D seismic survey over the Hector trend.

AWE and the PEP 38483 joint venture participants will acquire approximately 414 sq km of 3D seismic over the Hector prospect in April 2005.

The seismic survey follows a series of transactions which involved the neighboring PEP 38460 (Tui) joint venture relinquishing the Hector area in the southern portion of the PEP 38460 block to the PEP 38483 partners.

The equity changes in PEP 38483 will see AWE's interest fall from 75% to 44.13%. The two other original partners, New Zealand Oil and Gas Ltd (NZOG), through its subsidiary Stewart Petroleum Co Ltd, and Pan Pacific Petroleum NL, through its subsidiary WM Petroleum Ltd, have also raised their stakes in PEP 38483. NZOG's interest will increase from 15% to 18.86% and Pan Pacific's interest will rise from 10% to 14.1%. The changes will be subject to official approval.

Equity in the Tui area permit PEP 38460, in which AWE, Mitsui, NZOG and Pan Pacific are also interest holders, remain unchanged. This permit is operated by Transworld through its subsidiary New Zealand Overseas Petroleum Ltd.

Seismic data processing and subsequent interpretation will take several months before prospects can be high-graded for drilling. The work will be fast-tracked with a view to drilling later in 2005 or early 2006.

AWE said it considers the Hector area to be highly prospective due to a combination of the favorable reservoir development within the Kapuni F sands (the same oil-bearing interval as in the Tui area and Maui B oilfields) and the prime location for oil charge from the adjacent Kahurangi Trough. Several F sand leads have already been identified on the existing 2D seismic and these are the primary objective of the 3D survey. There is also a large stratigraphic trap within the Kapuni C sands which is partly coincident with the deeper F sand closures.

In PEP 38460, a 72 sq km extension to the Tui 3D seismic survey will be acquired in late March to fully define the extent of the Pateke oil discovery, which was made in 2004 by the Pateke-2 well. The Tui extension survey will be managed by AWE on behalf of the operator Transworld.

This survey will be conducted in parallel with the Front End Engineering Design work for the development of the Tui area oil fields.

AWE's managing director Bruce Phillips said over the past seven years his company has been positioning itself "to gain greater participation in the most exciting exploration plays in New Zealand."

Mr. Philips said the Tui area oil field developments had enhanced his company's view on the commercial attractiveness of exploration and development opportunities in New Zealand.

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