Sydney-headquartered AWE said in its December quarterly report, released to the ASX yesterday, that it was looking forward to a major exploration drilling campaign in New Zealand later this year.
AWE and its partners would start its campaign with the Cutter-1 well in PEP 38259 in the offshore Canterbury Basin during the third quarter.
It would then use an option from the Tui Area (PMP 38158) joint venture to drill Hector-1, in licence PEP 38483, ahead of the previously announced four Tui Area development wells and two exploration wells, probably Taranui-1 and Tieke-1, in PMP 38158.
AWE also said it wanted to drill a well to test the West Cape prospect in PEP 38481, although timing of that depended on the availability of a suitable rig.
Company managing director Bruce Phillips said that AWE had recently finalised a conditional agreement with Claire Energy Australia and Beach Petroleum, which would see Claire and Beach fund AWE’s share of the expected costs of Cutter-1. Therefore, AWE had reduced its interest in PEP 38259 from 50% to 25%. The other partner is Cutter is operator Tap Oil (40%).
Cutter-1 would test the hydrocarbon potential of a prospect located in a proven petroleum province in relatively shallow water about 200km southwest of Christchurch, the South Island’s largest city. The prospect had the potential to hold about 70-80 million barrels of recoverable oil.
Further north, off Taranaki, AWE had earned 10% equity in PEP 38481 and PEP 38482 by funding a share of the West Cape seismic survey. Following interpretation of this survey, the partners had elected to drill a well on the West Cape prospect and, therefore, AWE had increased its stakes in these permits to 40% and taken over as operator.
“We are looking towards New Zealand for a major exploration drilling campaign, where the industry is viewing the Cutter and Hector wells with significant interest,” said Phillips.
Last Friday AWE announced it was effectively taking over as operator of the Tui mining licence PMP 38158 and the Hector South sub-block (HSSB) within PEP 38483, as well as increasing its interests in these areas.
That meant the AWE now held significant stakes in and control over four promising areas immediately west and northwest of the comercial Maui field.
“Initial cashflow from the first of our offshore developments will substantially change AWE as a company,” Phillips said.
Meanwhile, fellow Tui and HSSB partner New Zealand Oil and Gas said in its latest quarterly report that it had spent NZ$3.2 million during the past three months acquiring additional shares in Pan Pacific Petroleum, taking its holding to 10.1%.
“The additional investment was made to increase the company’s exposure to the Tui oil fields and associated prospects,” said NZOG chairman Tony Radford.
Hector-1 would be drilled into a structural closure at the Eocene-aged Kapuni C sands level and in a similar setting to the Tui Area fields (Tui, Amokura and Pateke). It had the potential to hold 50 million barrels of recoverable oil.
“If the structure does contain oil, and is filled to ‘spill point’ then the potential prize could be greater,” Radford said.
NZOG was also continuing it efforts to secure a drilling rig to drill the Taitapa prospect in offshore Taranaki licence PEP 38484. Taitapa was located in 70m of water and could be drilled with a jack-up or semi-submersible rig.
But obtaining a rig was a “major challenge in an overheated international drilling market; talks with potential partners are in progress,” Radford said.
