Indo-Pacific Energy on Wednesday said it had reached agreement with Preussag Energie to fund the drilling of the Huinga-1B sidetrack well.
Indo-Pacific is to receive a free carry, to an agreed expenditure cap, by Preussag, which will take an 11.5% interest in the drilling of the Huinga-1B well. Preussag Energie will fund an additional 0.8% share to retain a total 12.3% interest in the prospect and the permit area.
Indo-Pacific chief executive Dave Bennett said he was delighted to have a company the calibre of Preussag Energie involved in the Huinga project.
"Preussag is a major German exploration company with worldwide interests, and was successful in its very first offshore well in New Zealand with the major Pohokura discovery. We wish them similar success in their first onshore New Zealand well," said Dr Bennett.
Preussag is believed to be intent on becoming a major player in the New Zealand exploration scene and in this country's gas sector. It is rumoured to be the preferred company to pick up two of Shell's promised divestments - a 10% stake in Maui and 3.667% of Pohokura which Shell has to sell to satisfy Commerce Commission concerns about market dominance.
The Huinga Deep Prospect is a large structure on the eastern overthrust margin of the Taranaki Basin, less than 5km east of the formerly prolific Waihapa oil field, as well as being north of and on trend with Swift Energy's Rimu oil discovery.
The original Huinga-1 well encountered oil shows when drilled in 1999. Huinga-1B will re-enter that well and deviate westwards to test a target mapped as having the potential to contain a similar magnitude of oil to the Waihapa and Rimu fields. The Huinga-1B sidetrack will be drilled by Parker Drilling Rig 188 from February, after it has finished the Makino-1 well just south of PEP 38716. Other participants in the Huinga-1B project are Swift Energy, Bligh Oil and Minerals, AWE, Antrim Oil and Gas, and Euro Pacific Energy.
Maui Development Ltd has formally asked the New Zealand government for a redetermination of the size of the Maui field.
MDL chairman Lloyd Taylor said, in a statement, that one of the reasons for the redetermination request was because MDL could find itself in a position where it was unable to supply agreed quantities of gas to the Crown and might be penalised for non-delivery.
MDL expected to be in a position by next March, when current reserves estimate studies would be completed, to meet the Crown and begin to agree a new Maui reserves figure, he added.
Once a new reserves figure was agreed on, the contract provided for an associated process to enable those remaining Maui reserves to be used to define a new delivery profile for Maui gas to the Crown.
"Essentially this process allows a matching of the quantities to be delivered from the Maui field with the latest estimate of the remaining reserves in the field. In this way MDL can redefine the quantities of gas which will be available to the Crown," Dr Taylor said.
There have been various previous estimates of the size of Maui and how long the field might be expected to last. There have also been various calls for the whole Maui contract to be renegotiated.
Last month Dr Taylor, who is also Shell's exploration and production managing director, said recently completed MDL studies revealed total expected recoverable Maui reserves, from the developed parts and easily accessible undeveloped parts within the mining licence, were now expected to be only 3800PJ. The original Maui contract between MDL and the Government was for the supply of 4085PJ of gas over 30 years from 1979. This meant the economic life of the field, which supplies about 80% of this country's gas needs, would end by mid-2007 and not mid-2009.
