By CHRIS DANIELS energy writer
New Zealand Oil & Gas shareholders hope their company's latest drilling venture turns out better than previous efforts.
NZOG shares have surged more than 80 per cent this year and yesterday gained a further 5c after the company said its Amokura-1 well had shown good signs of
oil.
Amokura-1, expected to cost between $15 million and $20 million to drill, was yesterday at a depth of 3692m off Taranaki, nearly at the target of 4100m.
The company, which says the well has the potential for 15 million to 35 million barrels of recoverable oil, told the stock exchange that "strong oil shows in sandstone were observed" from core samples.
Next, electronic detectors will be put down the well, which should provide more definitive proof of oil or gas. Results of these tests are expected tomorrow or on Monday.
NZOG owns 12.5 per cent of the exploration block containing Amokura-1. Its formerly part-owned subsidiary company, Pan Pacific Petroleum, has a 10 per cent stake. Its share price rose 15.4 per cent yesterday on the NZX.
NZOG's share price gains this year are not all due to the Amokura well. The company also received permission to go ahead with a coal mine development in the South Island, and it was able to sell down part of its stake in the Kupe gas field.
US company Transworld owns 45 per cent of the Amokura prospect and is also the operator. Japanese company Mitsui has a 12.5 per cent stake, while the Australian company AWE has 20 per cent.
The company's shareholders will be hoping for a good return from Amokura, after a dry few years.
Its last well, Tuihu-1A, drilled last year in partnership with Swift Energy, Origin and Indo-Pacific, found only small amounts of gas and was abandoned in October. Some oil was found in its Tui-1 well earlier that year, but its Optio-1 well drilled the year before found only small amounts of oil.
After the Amokura well, the drilling rig Ocean Bounty will move to another area in which NZOG has a stake, called Pukeko. NZOG says this site has the potential for up to 80 million barrels of recoverable oil.
Shell, Todd Energy and global exploration company OMV are then due to take over the Ocean Bounty rig and start drilling an exploration well in mid to late May.
Exploration activity is continuing on land also, with Swift Energy and NZX-listed Austral Pacific now drilling new wells in the onshore part of the Taranaki basin.
The Government last month opened bidding for the "Offshore Northland Block Offer", which runs until December 15. During this time, exploration companies study geological data held by Crown Minerals and decide which parts of the seabed they want to drill.
Associate Energy Minister Harry Duynhoven said research by the Institute of Geological and Nuclear Sciences on the Northland basin was "showing signs there is a significant potential for North Sea-sized oil and gas fields to be present".
Before companies will commit to drilling wells, they need accurate information about the geology of the area from seismic surveys.
The seismic survey ship Polar Duke has just started this work off the south-eastern coast of the South Island.
By CHRIS DANIELS energy writer
New Zealand Oil & Gas shareholders hope their company's latest drilling venture turns out better than previous efforts.
NZOG shares have surged more than 80 per cent this year and yesterday gained a further 5c after the company said its Amokura-1 well had shown good signs of
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