AWE Kicks Off Taranaki Drilling Program

Australian Worldwide Exploration Limited

AWE Ltd's eight-well continuous offshore drilling campaign in New Zealand's Taranaki basin is set to start with the drilling rig Ocean Patriot now on tow for the first well site.

The 2006 drilling campaign is the biggest in AWE's history and is believed to be the largest, continuous, offshore drilling program ever undertaken in New Zealand. AWE will operate all 8 wells in the offshore Taranaki basin program.

The first well, Tieke-1, which has a potential recoverable volume of 15 million barrels of oil, is expected to start drilling in a week once the Ocean Patriot is relocated from the Canterbury basin where it recently completed drilling the Cutter 1 well. AWE has a 42.5% interest in the Tieke-1 well and the Tui area oil development.

Tieke-1 is located in PMP 38158, 40 km off the west coast of New Zealand's North Island and approximately 8 km from the Tui oil field. The well will be drilled to a planned total depth of 3,600 meters, in a water depth of 122 meters and is expected to take 18 days on a "trouble-free" basis.

Recent exploration in the Taranaki basin by AWE and its joint venture partners has resulted in three commercial discoveries from only five exploration wells in the past four years. These discoveries, Tui, Amokura and Pateke, are currently being developed as part of the Tui area oil development within PMP 38158. The development drilling for this project, comprising 4 horizontal development wells, will start immediately after the completion of the Tieke-1 well.

AWE's managing director, Bruce Phillips, said: "AWE has built an extensive acreage position in the western Taranaki basin over the past 4 years following the initial success of the Tui oil discovery. We are now in a position to test our geological ideas in a program that if successful, will be material for AWE shareholders.

"The Taranaki basin exploration program is financially risking less than 10 cents per AWE share, but any individual success will deliver a reward many times higher."

Participants in Tieke-1 and PMP 38158 are:

  • New Zealand Overseas Petroleum Pty Ltd ("AWE") 22.5%
  • AWE New Zealand Pty Limited ("AWE") 20.0%
  • Mitsui E & P New Zealand Limited 35.0%
  • Stewart Petroleum Company Ltd 12.5%
  • WM Petroleum Ltd 10.0%