NZ oil shares fall as Tui well comes up short

Shares in listed New Zealand oil and gas companies exploring the Tui prospect fell immediately the NZX opened this morning, following announcement that "an economic accumulation of hydocarbons is not present" at the Tui SW-2 exploration well.

New Zealand Oil & Gas, a 12.5 per cent partner in the well, fell 2.8 per cent to $1.39, while shares in 10 per cent partner Pan Pacific Petroleum fell 3.7 per cent to 26 cents.

Shares in PPP and NZOG both rose last week when initial drilling reports found hydrocarbon shows.

There had been hopes that a commercially viable 10 metre oil column may have been found.

The well will now be converted to allow gas injection from the main Tui field, as was always intended, NZOG spokesman Chris Roberts told BusinessWire.

The Kan Tan IV drilling rig will now move several kilometres to the south-east to drill the Kahu-1 exploration well for the same partners.

The Tui South West prospect is located in mining licence PMP 38158, adjacent to the producing Tui oil field.

The field operator is ASX-listed AWE Ltd at 42.5 per cent, and Mitsui E&P Pty Ltd is a 35 per cent participant in the two well campaign.