With an area of 11,829sqkm, the permit is located off the South Island in the Great South Basin and is adjacent to the southern boundary of PEP38222, in which Magellan also has a 100% interest.
Award of permit provides a relatively low cost expansion into a high risk/high reward exploration area for Magellan and takes the company's total interests in the area to over 25,000sqkm.
Magellan will be embarking on a seismic reprocessing program of at least 2,000km, with the aim of firming up potential drilling targets. Although there are no firm well commitments associated with the permit, Magellan intends to attract partners to fund any future drilling in the permit.
The permit contains the 1970's Hunt Oil Kawau gas condensate discovery, for which New Zealand Crown Minerals cites estimated reserves of 461bcf and states that this estimated reserve had been considered sub-commercial due to water depth and isolation.
Magellan will be investigating the potential for the Kawau structure to be larger than originally mapped, the commercial potential of associated condensate, and assessing the potential of several other nearby structures already identified.
The company will also be evaluating a potential oil play fairway along the western side of the permit.
Magellan already has interests in onshore Taranaki Basin permits PEP38746, PEP38748 and PEP38753, onshore Canterbury Basin permit PEP38256, and offshore Great South Basin permit PEP38222.
