EXPLORATION

Surprises revealed in Kiwi block awards

A few surprises were thrown up with Associate Energy Minister Paul Swain's awarding last Friday o...

Most work programs submitted for the standard New Zealand five-year permit term were pretty much standard fare - seismic reprocessing or acquisition and geological and geophysical studies in the first year, with exploratory wells drilled in the third and fourth years.

However, some pretty aggressive bidding for the most favoured acreage, often adjacent to or near the most recent oil and gas discoveries, has grabbed the attention of industry commentators.

The two most noteworthy examples involve Todd Energy, both onshore and offshore.

Todd Energy, which is part of the family-owned Todd Corporation, and fellow Maari oil field partners Shell New Zealand and Austria's OMV have won two offshore licences, both to the northwest of this country's single largest energy resource, the Maui field.

The three have committed to shoot 400km of new seismic in the more westward licence PEP 38481 and 1200km of seismic in PEP 38482. They have also committed themselves to drill an exploration well in PEP 38482 within the first two years, instead of the more usual three or four years.

"That's a pretty aggressive program and probably reflects the confidence Shell, Todd and OMV have that there are some good prospects out there, which may well yield some commercial discoveries," said one commentator.

The development of any commercial finds in PEP 38482 could be linked in with the development of Maari and the use of the Whakaaropai FPSO, which is presently processing crude from the Maui B oil rims.

More unusual and interesting is Todd going it alone, without long-time exploration partner Shell New Zealand, and the very aggressive work program that won it the new onshore licence PEP 38760.

Todd has undertaken to complete geological and geophysical studies and to drill an exploration well, all within the first year of the permit.

"That is interesting; it's also pretty aggressive bidding, maybe to fend off Swift," said a commentator, referring to the great interest in the potential of the prospective eastern margin trend in the Taranaki Basin following the Rimu-Kauri and now Huinga oil discoveries.

Swift Energy New Zealand, as expected, won two new permits - PEP 38756 to the northwest of its Rimu oil field and PEP 38759 to the west and south of the onshore-offshore Kauri prospect in south Taranaki.

Mystery newcomer Bridge Petroleum, which EnergyReview.Net last week revealed as a company recently formed by Denver-based Westech Energy president Ed Davies and his New Zealand offsider Kevin Johnson, also plans an aggressive exploration campaign in at least one of the three new permits it won.

Bridge Petroleum's work program for PEP 38745 - southwest of the commercial McKee and Mangahewa fields - says it will drill a well, targeting the shallow Miocene-aged Mt Messenger-Moki sands, in each of the second and third year of the licence.

Bridge also says it plans a more expensive and deeper well - this time targeting the Eocene-aged Kapuni formation - in the fourth year, if it can reach agreement with adjacent permit holders to share the cost of a joint Kapuni group well.

Fellow small player Re-Source Exploration has picked up the small onshore licence PEP 38757, between the Kapuni and Waihapa fields, and plans to re-evaluate the Cheal discovery made by New Zealand Oil and Gas several years ago. It will be targeting the shallow Mt Messenger sands and even shallower Urenui formation. Re-Source Exploration has also been awarded the bigger PEP 38758 right on the eastern margin of Taranaki.

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