AWE announced today that Beach will earn a 20% interest in the PEP 38482 permit by contributing 40% of the costs of drilling Kopuwai-1, which is expected to spud in September or October, towards the end of AWE’s current New Zealand drilling campaign, using the Ocean Patriot rig.

Early this month Mitsui farmed-in to the licence, earning a 30% stake by paying 60% of the costs of Kopuwai-1.

Following the signing of these agreements, AWE will retain operatorship and a 50% interest in the permit but will be fully carried through the drilling of Kopuwai-1.

AWE had previously held PEP 38482, in partnership with Shell, Austrian major OMV and Todd Energy, but these companies exited the license.

The Kopuwai prospect is located about 15km from the Tui Area production facilities and has a mapped closure extending over 30 square kilometres, with the potential to hold in excess of 100 million barrels of recoverable oil, according to AWE.

The primary objective of the well is the Eocene-aged Kapuni F Sand sequence, which is productive at the Tui, Amokura and Pateke oil pools, and also at the Maui gas field.

This is Beach’s second offshore New Zealand farm-in. In late 2005, it entered the Tap Oil-operated PEP 38259 in the South Island's Canterbury Basin. But the well drilled there last October, Cutter-1, failed to find commercial hydrocarbons.

PEP 38482 participants will be operator AWE (50%), Mitsui E&P Australia (30%) and Beach Petroleum (20%).