Horizon And Delta Buy Into Maari Offshore Oil Prospect

Horizon Oil NL and Delta Oilfield Developments, have separately farmed in to the offshore Taranaki licence PEP 38413, where the Maari-2 appraisal well is currently being drilled by Diamond Offshore's semisub, Ocean Bounty.

The permit contains the undeveloped Maari and Manaia fields.

Sydney-based Horizon Oil (formerly Bligh Oil and Minerals NL which already has a number of onshore interests in Taranaki) announced it had paid permit operator OMV New Zealand Ltd $US1.5 million for a 10% working interest in PEP 38413, which also means it will contribute 10% to the cost of drilling the Maari-2 appraisal well that the semi-submersible Ocean Bounty rig spudded on January 10, 2003.

Delta Oil Taranaki, a subsidiary of Perth-based Delta Oilfield Developments, announced is was to earn a 5% stake in PEP 38413 by carrying Todd Petroleum Mining through the drilling of the Maari-2 well. Delta Oilfield Developments — a joint venture between Perth-based firms Westgold Resources and Carpenter Pacific Resources.

The farm-ins mean OMV now has a 69% working interest in the permit, Todd Petroleum Mining Ltd a 16% stake, Horizon Oil 10% and Delta Oil Taranaki 5%.

OMV New Zealand managing director Wolfgang Zimmer said Maari-2 was an exciting step in OMV's oil and gas exploration in New Zealand, with the company looking forward to a productive future. "Positive results will likely encourage even more exploration in the area," he said from Perth.

Maari-2 is being drilled to approximately 1500 meters below the Ocean Bounty's rotary table and will be cored and evaluated, including wireline logging and wireline fluid sampling, then permanently abandoned. The well will not be flow tested.

However, depending on the results, Maari-2 may be sidetracked to investigate another point in the permit area. This will not be determined until the well reaches its final total depth.

Horizon Oil said Maari-2 was designed to increase the level of proven reserves and provide reservoir information for proposed development of the field. It currently estimates proven and probable reserves in the Moki Formation of the Maari Field to be 35 million barrels of oil and believes there is potential for a further 16 million barrels of oil in other sands at Maari and Manaia.

Depending on the outcome of this appraisal well, a development will be installed involving horizontal producers, supported by gas lift, horizontal water injectors, subsea wellheads and a floating production storage and offloading (FPSO) facility.

Development expenditure, assuming the leasing of the FPSO, was estimated to be about $US115 million. Horizon said first production could occur in 2005 at an initial rate of about 30,000 barrels of oil per day.

Hydrocarbons have been encountered at three levels in the Maari structure, the M2A sands, Miocene-aged Moki formation and the Eocene-aged Mangahewa formation.

Horizon Oil said the same reservoirs had also been encountered at the more southern Manaia field, although the larger accumulation appeared to be in the Mangahewa formation, rather than the Moki as at Maari. Only one well had been drilled in the Manaia field, Maui-4, drilled on the flank of the structure.

A 500 sq km 3D seismic survey had already been shot over PEP 38413, including the Maari and Manaia structures, which were simple dip-close anticlines at all reservoir levels with top seal provided by interbedded marine shales.