NGC has made a A$2 million payment to the junior producer against future gas purchases, which gives it first crack at any Indo-Pacific produced gas. Indo-Pacific now avoids having to go to the market for funding to commercialise the Kahili and Cheal discoveries.

Kahili-1A/B previously flowed at 5 million standard cubic feet per day (MMSCf/d) and a second well might bring total field production to over 10 MMScf/d. However, successful production for an extended period from Kahili-1A/B is required before any second well would be considered.

Indo-Pacific holds 45% equity in Kahili licence PEP 38736, along with Australian companies Tap Oil (30%) and Claire Energy (25%).

NGC Chief Executive Phil James said, "NGC has previously announced it is looking at ways of developing its wholesale gas position in the post-Maui supply era. This era is likely to be characterised by supply from multiple smaller fields, with a strategic proportion of gas being brought to the market by smaller explorers developing previously uneconomic fields in Taranaki.

"NGC is pleased to have established a relationship with Indo-Pacific that will facilitate the timely development of new reserves and to help get this gas to end users as the Maui field winds down."