NZOG seeks Canterbury delay

NEW Zealand Oil and Gas continues to post robust levels of income despite the woefully low level of the oil price, and is keeping the flame alive for the potential of its Canterbury Basin permits.
NZOG seeks Canterbury delay NZOG seeks Canterbury delay NZOG seeks Canterbury delay NZOG seeks Canterbury delay NZOG seeks Canterbury delay

Haydn Black

Reporter

It is working with regulator New Zealand Petroleum and Minerals to change conditions over its frontier blocks off the South Island and extend the timeframe on when a commitment must be made to drill Galleon or Clipper better reflect the prevailing oil price and high levels of exploration risk.

NZOG, which delisted from the Australian Securities Exchange to focus on the NZX, is now talking with NZPAM after it and 50% partner Beach Energy received new information relevant to the Barque prospect from a data swap, most likely from neighbouring permit holder Anadarko Petroleum following a data swap.

It considers the data is crucial to understanding the prospectivity of the large Barque structure within PEP 52717, and it wants additional time before its drill or drop decision.

It also wants to change the conditions around the adjacent, 100% owned Galleon area, PEP 55792.

If it can't win extra time from the government NZOG may again need to drop its interests in the areas, considered to be some of the most promising of NZ's less explored basins.

Further south in the Great South Basin, where it shares the Toroa permit (PEP 55794) with Woodside Petroleum (70%), the partners are undertaking interpretation on PSDM data from the 1100sq.km 3D survey shot in early 2015.

NZOG's operating revenue fell from $NZ47.6 million to $29.9 million, with small falls in income from its interest in Cue Energy Resources (48.11%) and the Kupe field, and a collapse in revenue from the Tui Area fields from $20 million to $6.6 million, largely due to the timing of oil liftings, however cash on hand has remained steady at just under $97 million.

And the company is working hard in the next generation of projects in Indonesia and New Zealand.

During the quarter, $3.8 million was spent on exploration, $1 million on share buy-backs, foreign exchange losses were $2.5 million and development costs were $3 million.

The Origin-operated Kupe output was down due to repairs to the Amine system, for a net share of 61,200 barrels of oil, while Tui produced a net 94,900bbl.

Tui production was down in the quarter only marginally, in-line with natural field decline, and continues to perform to budgeted expectations.

The joint venture conducted a review of production performance data and rate trials last quarter, in an effort to optimise the system and test whether to bring the Pateke-3H well back in to production. All five Tui wells are now routinely on-line, with Pateke-3H and Pateke-4H able to flow in tandem for the majority of the time.

The continuous reinstatement of the Pateke-3H well and the associated management of the system yielded an increase in production of about 600bopd.

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