ONSHORE, CANTERBURY BASIN, NZ
2nd May, 2008
Gas2Grid Limited (“GGX”) is pleased to announce that their new exploration wildcat well, Kate-1, will commence drilling operations next week. Kate-1 is located within the northern part of the onshore Canterbury Basin, South Island, NZ, approximately 60 kms north of the city of Christchurch.
Kate-1 will be drilled on a surface anticline that has been mapped in the subsurface using seismic data acquired in 2006. This well will be drilled to a total depth of approximately 1,000 metres and will likely take 12 days to drill. Kate-1 will be drilled by a newly constructed rig which is currently finalising a well in the North Island, at a location northeast of Wellington.
The main target is sandstone reservoirs within the Late Cretaceous Broken River Formation and secondary targets comprise shallower sandstone and limestone reservoirs, all within mapped structural closure. The anticline is highly faulted at depth and comprises a prospect with estimated oil in place potential of up to 25 million barrels.
An oil seep has been reported on the western side of the Kate anticline and hydrocarbon soil surveys have also recorded anomalously high concentration levels within the same area providing some encouragement for hydrocarbon charge to the Kate Prospect.
BACKGROUND: GGX announced in 2007 that it had entered into an agreement with a privately owned NZ company, Green Gate Limited, to farmin to the onshore portion of PEP 38260 located in the north Canterbury Basin. Under the terms of that original agreement and subsequent amendments GGX has paid $1.2 million towards the drilling of Kate-1 and in return shall acquire an undivided 40% interest in the onshore portion of PEP 38260, covering an area of 2,429 square kilometres. GGX has also paid $600,000 cash in order to acquire another 15% interest in the onshore portion of PEP 38260 (total 55%). Execution of the agreements covering the farmin was completed in early 2008.
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