Houston-headquartered Swift Energy and MRP announced the deals today, which MRP chief executive Doug Heffernan said were his company’s first foray into gas exploration and formed part of the company’s efforts to expand its current electricity generation portfolio.
“We’re delighted to be partnering with such an experienced high quality explorer as Swift Energy in what we anticipate will be the first of several gas exploration projects Mighty River Power will develop over the next few years,” Heffernan said.
Finding, securing and developing new gas fields for power generation is increasingly important given the prospective run-out of the Maui gas field, according to Heffernan.
“This program with Swift is consistent with our intent to secure multiple generation options to help meet the future electricity needs and demands of New Zealanders and our economy,” he said.
Swift Energy president and chief executive Terry Swift also welcomed the new alliance and says MRP will be a partner in the Tarata Thrust exploration program planned for 2005.
“Together we are excited to test several significant targets that would hopefully identify some of the future supply of natural gas for the growing needs of New Zealand,” Swift said.
Operator Swift Energy is to drill exploration wells in the Goss and Trapper prospects, located within Swift’s TAWN area, and the Tawa prospect located in the more southern Rimu-Kauri area.
The first of the wells, to test a possible deep gas horizon below the currently producing Waihapa oil field, is expected to begin drilling in late May, with the other two wells following immediately afterwards.
It is known Swift and MRP will be using the Parker Drilling 246 rig once it has finished drilling Cardiff-2B for Austral Pacific Energy and its PEP 38738 partners and then the Greymouth Petroleum Turangi-1 well in PEP 38762.
MRP is funding the drilling of these deep gas prospects in exchange for 50% equity in any commercial discoveries.
Once MRP has earned its 50% interest, Swift Energy and MRP will equally share any future development costs, though Swift will continue to maintain its 100% working interest in the existing Tawn and Rimu-Kauri producing horizons and production facilities.
In the past year all the major downstream players – from Methanex, NGC and Ballance Agri-Nutrients to Contact, Genesis and now MRP – have jumped in upstream trying to ensure gas for the post-Maui age.
Meanwhile, Heffernan has told the Parliamentary Commerce Select Committee that the government-owned firm may sink up to NZ$1 billion in developing geothermal power stations in the North Island over the next five years.
He said another 400MW of geothermal power could be developed in the central North Island but that would require an extensive drilling program.
MRP planned to spend about NZ$100 million during the next few years, expanding its 28MW Rotokawa geothermal plant to 100MW and the 55MW Mokai geothermal plant to near 100MW. The company was also examining fields at Ngata Mariki and Mangakino.
