AWE and Mitsui Ink New Zealand Exploration Deal

AWE reports that it has entered into a new exploration agreement with Mitsui in the offshore Taranaki basin, New Zealand.

Under the agreement, Mitsui E&P Australia Pty Limited will earn a 30% interest in exploration permit PEP 38482 by paying 60% of the costs (capped at the budgeted cost) of the next exploration well (nominally Kopuwai-1) in the PEP 38482 area.

AWE’s equity in the permit increased to 100% following the recent withdrawal of the previous permit joint venture partners. However, this farmout agreement with Mitsui will result in AWE retaining 70% equity after funding only 40% of the Kopuwai-1 well cost.

The Kopuwai prospect is located approximately 20 kilometres from the Tui Area Development. The Kopuwai-1 well is currently expected to be drilled in September – October 2007, towards the end of AWE’s current New Zealand drilling campaign.

The prospect has a mapped closure extending to 30 square kilometres with potential in excess of 100 million barrels of recoverable oil. The primary objective of the well is the Kapuni F Sand sequence which is productive at the nearby Tui, Amokura and Pateke oil fields and also at the giant Maui field.

AWE’s managing director Bruce Phillips said:

"This transaction enhances the already strong AWE-Mitsui alliance in Australasia. Mitsui has consistently proven to be a strong, reliable and knowledgeable joint venture partner for AWE.

"AWE and Mitsui share a belief in the potential for substantial new oil discoveries in the area around the Tui Area Development, where even modest exploration success could be commercialised rapidly by accessing the nearby Tui production facilities.

"We look forward to continuing our mutually rewarding relationship with Mitsui."

AWE’s planned drilling sequence for the Taranaki basin is now:

Well		Permit		AWE		Co-		Indicative
				equity		ventures	Timing
Hector-1	PEP 38483	44.317%		Mintsui,	Drilling
						NZOG,		now
Taranui-1	PMP 38158	42.5%		Mintsui		Aug-Sep
West Cape-1	PEP 38481	40.0%		OMV		September
Kopuwai-1	PEP 38482	70.0%		Mitsui		Sept-Oct