The UK-based Electro Silica has agreed to fund the acquisition of 2,000km of 2D seismic in the permit to earn a 25% interest and an option to drill an exploration well to earn a further 50%.

Tom Fontaine, Bounty's managing director, said the partnership with Electro Silica confirms the Joint Venture's belief in the prospectivity of the permit.

"We are very optimistic about exploring in this permit. The permit contains a large structure called Toroa that was drilled in 1976 but not tested - we believe this may hold commercial quantities of recoverable gas.

"We have also identified a number of features that each have the potential to hold in excess of a billion barrels of oil.

"Our discussions with potential customers for the gas have so far received a strong response. Methanex New Zealand Limited has already provided an Expression of Interest," said Fontaine.

"The next step for us is to acquire the seismic to allow us to optimise our drilling location - once we have done that, we plan to bring in a rig and drill our best prospect."

The PEP 38215 permit covers 13,614sq.km in the Great South Basin off the south coast of New Zealand.

Probable recoverable gas reserves of 0.9 trillion cubic feet (tcf) and additional possible recoverable gas reserves of 2.2 tcf have been estimated in the Toroa structure. Elsewhere in the permit, structures with multi-billion barrel oil potential have been identified.

Seismic reprocessing of more than 6,200km of available seismic data in the permit was completed early this year. Reinterpretation and re-mapping of the data has identified a number of large untested structures.

Electro Silica is an unlisted UK based company. Their oil and gas assets are managed by their wholly owned subsidiary Electro Silica Oil and Gas Ltd, an oil and gas exploration company with key projects in Oman and Mongolia

Interests in PEP 38215 are Bounty Oil & Gas NL 26.25% (operator), Hardman Resources 33.75%, Hardman Oil & Gas 7.5%, Albatross Energy 7.5% and Electro Silica 25.0% (subject to farmin).