NZO
13/06/2014 09:02
MINE
REL: 0902 HRS New Zealand Oil and Gas Limited
MINE: NZO: Oi-2 spuds
Drilling is underway in the Oi-2 well in Petroleum Mining Permit 38158, the
operator has advised.
Drilling operations began at 5.30 this morning New Zealand time. The current
operation is drilling ahead with a 36 inch drill to 228 metres.
Oi is about 37 kilometres off the coast of Taranaki, New Zealand, in about
120 metres of water. The well is a replacement for Oi-1, which was abandoned
after encountering difficulties in the well bore at 1,507 metres. Oi-2
targets the same prospect and will be drilled to a planned total depth of
3,881 metres (below rotary table).
The operator has publicly stated a pre-drill un-risked best estimate
prospective resource of 11 million barrels of recoverable oil. The New
Zealand Oil & Gas share at drilled equity of 18.75 per cent is 2.06 million
barrels, with the option to restore to 27.5 per cent equity (3 million
barrels) in exchange for reimbursement of pro-rata costs and a buy back
premium. A further joint venture partner, Pan Pacific Petroleum, has publicly
released its own estimates of the prospective resource. New Zealand Oil & Gas
considers the well has a 17 per cent geological chance of success, and a 16
per cent chance of commercial development.
The drilling programme is now planned to total around 48 days at a cost to
New Zealand Oil & Gas estimated to be around USD8.34 million (updated
figure).
Resources in this statement have been evaluated using a probabilistic
methodology. The estimate of prospective resources referred to in this
statement is based on, and fairly represents, information and supporting
documentation prepared by New Zealand Oil & Gas Vice President of Operations
and Engineering Andrew Jefferies (B Eng Mech Hons, Msc Pet Eng, MBA), a
Society of Petroleum Engineers Certified Petroleum Engineer who has over 23
years of industry experience, and reflects and summarises the most current
information supplied by the joint venture operator. The estimated quantities
of petroleum that may potentially be recovered by the application of a future
development project relate to undiscovered accumulations. These estimates
have both an associated risk of discovery and a risk of development. Further
exploration appraisal and evaluation is required to determine the existence
of a significant quantity of potentially moveable hydrocarbons.
The joint venture partners in the Oi exploration well are: AWE Limited:
31.25% (Operator).
Pan Pacific Petroleum: 50%
New Zealand Oil & Gas (through subsidiary): 18.75%.
John Pagani
External Relations Manager
+64 21 570 872
End CA:00251550 For:NZO Type:MINE Time:2014-06-13 09:02:21
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