Contact’s half-yearly results and overview presentation last week included such statements as: “The strategic drivers for Contact to become more directly engaged upstream are as strong as ever.”

Contact said despite higher gas prices there was still insufficient exploration activity, the market remained highly concentrated, and Contact was well positioned to manage development risks for new gas fields into a small gas market. Therefore it was evaluating how to support exploration activity, including the potential for farm-ins.

There was also the potential to use Origin’s extensive expertise, the company said.

The presentation said Contact was likely to acquire new seismic in the last quarter of this year in offshore Taranaki licence PEP 38493, the company’s current sole upstream interest.

Other exploration options included farming-in to PEP 38478 (where Origin and New Zealand Oil & Gas each hold 50% equity), PEP 38485 (Origin, OMV and Todd Energy, 33% each), and the Western Platform licence Shell wants to exit, PEP 38481-482 (Shell NZ, 60%, OMV 25%, Todd, 15%).

Contact also said the Kaheru prospect off south Taranaki (in the former PEP 38737 licence) and future extensions to the Kupe gas-condensate field in PMP 38146 (Origin 50%, NZOG 15%, Genesis Energy 31% and Mitsui E&P 4%) were of interest.

Early this year NZOG said further evaluation of prospects within PEP 38478 pointed to the Mangatoa (Cretaceous) prospect having recoverable reserves possibly as great as 3 tcf of gas and that further assessment of drilling options pointed to drilling a single vertical well offshore using a jack-up rig, possibly late this year.

NZOG and Origin are offering up to half their equity in PEP 38478 to potential farm-in partners.