Origin, Anadarko Form 50-50 JV Offshore New Zealand
Origin Energy has reached agreement with Anadarko New Zealand Company to farm out an undivided 50% interest in its offshore exploration permit PEP 38262 in the Canterbury Basin, New Zealand.
Key features of the agreement and the potential of the exploration permits are:
- Prior to signing the agreement Anadarko, at its cost, completed specialist processing of a three dimensional seismic survey recorded by Origin in 2009 over the large Carrack/Caravel prospect complex in PEP 38262.
- The Carrack/Caravel prospect, if established to be hydrocarbon bearing, has the potential to hold recoverable resources in excess of 500 million barrels of oil equivalent.
- Based on its evaluation of the area, Anadarko has agreed to fund the first US $30 million of joint venture costs of the drilling of an exploration well on the prospect which is located in water depths around 1,000 meters. Costs thereafter will be met jointly by Anadarko and Origin at their respective 50% equity level.
- The drilling of a well becomes a permit commitment after August 21, 2010.
In addition to the farm out relating to PEP 38262, Anadarko has an option to acquire a 50% interest in the adjoining permit PEP 38264 for a consideration of US$100,000. This option is exercisable by 8 April 2010.
Origin's Executive General Manager, Geoscience & Exploration New Ventures, Dr Rob Willink, said, "Origin has been excited by the petroleum potential of the frontier Canterbury Basin, particularly the extension of this basin into deep water, since first commencing evaluation studies in the area in 2005.
"We are now fortunate to have been joined by a company with a proven capability operating in challenging deepwater environments and this expertise will facilitate the safe, efficient and cost effective execution of the exploration program before us," he said.
The Carrack/Caravel prospect is a robust structural closure with twin crests that covers an area of some 390 square kilometers. This aerial extent is significantly greater than that of New Zealand's largest gas field, Maui, in the Taranaki Basin which covers around 160 square kilometers.
Seismic data over the structure is characterised by the presence of amplitude anomalies that conform to structure at the level of inferred Cretaceous reservoirs. More localised anomalous seismic responses are also observed in the overlying Tertiary sequence which are interpretable as gas-charged reservoirs shallower in the section.
The nearest well to the prospect is Galleon-1, drilled by BP in 1985 and located some 30 kilometers to the northwest, which flowed gas at 10.6 million cubic feet per day and associated condensate at 2,240 barrels per day on test of Cretaceous sandstone reservoirs.
The Joint Venture will now move forward to secure a suitable rig for the drilling of an exploration well, most likely in 2011. The Joint Venture is keen to share rig mobilization and demobilization costs with other operators that may likewise proceed to drilling in the vicinity.
Subject to ministerial approval and subsequent registration of documentation, and the exercise of the option to progress to farm in to PEP 38264, permit interests for both PEP 38262 and PEP 38264 will be as follows:
- Anadarko New Zealand Company (Operator) 50%
- Origin Energy Resources NZ Limited 50%
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