The offshore Taranaki gas prospecting area Mangatoa may hold 2000 petajoules of gas, more than half the original size of the dwindling Maui field, New Zealand Oil and Gas says.
General manager Gordon Ward said the risk was high in trying to develop the prospect.
It remained to be seen whether the
flow rates would be good enough for commercial production.
To drill a well in this field, mostly offshore in northern Taranaki, was expensive, probably more than $20 million.
"Often exploration is about recycling old ideas and identifying something somebody else has missed."
Mr Ward said the Maari and Ngatoro oil fields were examples of that. "It's large with the potential of more than 2 trillion cubic feet [about 2000 PJ] of gas. That's of a Maui-type size with a lot of risk."
The two biggest gas fields in New Zealand yet to be developed are Pohokura, estimated to hold 600 PJ of gas, and Kupe, with 240 PJ.
"It's a bit like Pohokura. It's got tight rocks and tight reservoir and getting sufficient flow rates is the difficulty with this particular prospect."
Mr Ward said there was no question now there was a market for the gas, with prices doubling in the past year.
NZOG is upbeat as interest in its oil prospects - Tui, Amokura and Pateke wells in the West Maui offshore Taranaki permit area - drives its share price to new highs to close yesterday up 1c at 86c.
Last week, it reported a $7.9 million profit for the year to June 30, from revenue of $14.5 million. The sale of two permit interests contributed $13.3 million to the result. Exploration costs of $3.8 million were written off.
In the next two months, NZOG is hoping to announce forward sales of coal from the Pike River development on the West Coast. The company also expects to settle funding.
Mr Ward said NZOG's options included private equity and equity from coal customers as well as an issue of shares in the coal company of which NZOG owned 71 per cent.
- NZPA
