Under the farm-in, Mitsui will earn a 30% interest in PEP 38482 by paying 60% of the costs to drill the next exploration well, Kopuwai-1, in the permit.

AWE’s equity in the permit had increased to 100% following the recent withdrawal of the previous joint venture partners.

AWE had previously held PEP 38482, and the adjacent PEP 381481, in partnership with Shell, Austrian major OMV and Todd Petroleum Mining. Shell is exiting the licences, which expire in August.

In May PEP 38401 was excised from PEP 38481 and granted to AWE (operator with a 50% stake), OMV (31.25%) and Todd Petroleum Mining (18.75%). AWE held onto PEP 38482 in its own right.

The Mitsui farm-out will see AWE retain 70% in that block after funding only 40% of Kopuwai-1, which is expected to spud either next month or the following one towards the end of the company’s New Zealand drilling campaign.

The Kopuwai prospect, about 20km from the Tui Area Development, has a 30 square kilometre mapped closure, with the potential to host more than 100 million barrels of recoverable oil, according to AWE.

The well is targeting the Kapuni F Sand sequence, which is productive at the nearby Tui, Amokura and Pateke oil fields and also at the giant Maui field.

AWE’s managing director Bruce Phillips said the farm-in enhanced AWE and Mitsui’s alliance in Australasia. The two companies are partners in Victoria’s Casino gas project as well as Tui.

“AWE and Mitsui share a belief in the potential for substantial new oil discoveries in the area around the Tui Area Development, where even modest exploration success could be commercialised rapidly by accessing the nearby Tui production facilities,” Phillips said.