Company public affairs manager Chris Roberts said NZOG was already looking at further exploration opportunities within its existing New Zealand acreage.

The company also believed there were further exploration prospects to be exploited in the Taranaki Basin and elsewhere in New Zealand, but there may not be enough such opportunities, he said.

Investing in Australia was a possibility if most current option holders chose to exercise those options by the end of June, according to Roberts.

"It's certainly possible we could enter Australia, given our existing links with [Tui operator] Australian Worldwide Exploration and [Kupe operator] Origin Energy," he told PetroleumNews.net from Wellington.

"But it's not a given. Perhaps we will raise our sights beyond New Zealand and Australia."

NZOG shares were yesterday trading on the Australian Securities Exchange at around $A1.31 and on the New Zealand Exchange at about $NZ1.56, compared with about $A1.10 and $NZ1.24 respectively two months ago.

With these recent appreciations of its share price, NZOG option holders were increasingly looking to be "in the money", he said.

While not all option holders would buy more shares, most were likely to do so, according to Roberts.

Earlier this month, Wellington-based broker McDouall Stuart said NZOG's most immediate near-term challenge might be the management of its 139 million $NZ1.50 options.

"This would bring a nice but major challenge for NZOG: how best to deploy up to $NZ208 million ($A173 million) of new equity it does not currently need", said the broker.

Roberts said NZOG was already looking at further exploration opportunities near the Tui Area oil and Kupe gas-condensate developments.

But at this stage, the two Momoho wells in the central field area of the Kupe mining licence PML 38146 were NZOG's only confirmed exploration efforts.

The jack-up Ensco Rig 107 is due to spud Momoho-1 late next month, which will be followed by a sidetrack. These will test the west and east compartments of the Momoho prospect, which are separated by a fault.

However, NZOG and the other Tui partners were considering drilling several "Tui look-alikes" within the Tui mining licence PMP 38158 and in licence PEP 38499 between Tui and the Maui gas field, according to Roberts.

Meanwhile, the company continues to assess other ways of investing its cash.

NZOG was also looking at farming in to other acreage, corporate acquisitions or purchasing producing assets, he said.

The junior had looked at purchasing the New Zealand assets of US independent Swift Energy but decided against it.

"We couldn't see good commercial benefits from doing so," he said.

NZOG had also looked at all 12 blocks of the 2008 Onshore Taranaki Basin Blocks Offer, which closes on May 30, and was interested in three or four.

The Tui partners are operator AWE (42.5%), Mitsui E&P NZ (35%), NZOG (12.5%) and Pan Pacific Petroleum (10%).

The Kupe partners are operator Origin Energy (50%), Genesis Energy (31%), New Zealand Oil & Gas (15%), and Mitsui E&P NZ (4%).