GNS exploration geophysicist Chris Uruski told PetroleumNews.net that the Raukumara Basin seemed to have sedimentary rocks up to 13km thick, compared with those in the offshore Taranaki Basin that were up to 8km or so in depth.

"The geothermal gradient is less than in the Taranaki, which turns out to be a good thing as the source rocks appear to be at least five kilometres down - exactly the perfect depth to be filled with oil and gas today," Uruski said from Wellington.

Last May GNS and government agency Crown Minerals started their third joint seismic survey, which included about 2200km of high quality 2D seismic and magnetic data acquired north of the Raukumara Peninsula, East Coast.

Uruski said initial processing of that seismic data indicated some surprisingly positive results.

The geology was different to the neighbouring East Coast Basin, which was deformed. The Raukumara seemed to have little deformation and potential volumes in the dozen or so leads identified indicated the potential for a billion barrels or more of oil in place, he added.

Until the latest survey, the area, covering an area of about 25,000 square kilometres, had been only lightly studied.

"No one really knew it was there before now but it is very interesting geologically. There was something on nearly every line of sesimic."

Uruski said that from the promising leads already identified, the region could be described as an exciting deepwater prospect.

Though there appeared to be large leads, with seemingly ideal conditions for hydrocarbon generation, more seismic and later drilling would be needed to confirm if there were also good trapping mechanisms, migration paths and seals.

"Raukumara seems to have all the necessary ingredients for a very interesting exploration program."

A detailed final report on the basin was due to be produced by mid-2008, he added.

Crown Minerals has previously indicated an offshore East Coast blocks offer may start in the third quarter of this year and be completed about a year later.