WELLINGTON, New Zealand – New Zealand Oil & Gas Ltd. (NZX:NZO;ASX:NZO) will become operator of the Kaheru permit offshore Taranaki and increase its ownership to 60% if a conditional agreement is ratified.
NZOG signed a conditional agreement to purchase a 15% stake (plus any additional interest acquired) in the Kaheru permit from AGL Upstream Gas (MOS) Pty Ltd. The new agreements are with AGL and Canadian company TAG Oil Offshore Ltd. The two companies increased their equity in the permit to 42.86% and 57.14% respectively through the recent withdrawal of ROC Oil and L&M Energy.
NZOG will be assigned 17.14% from TAG (subject to ministerial consent) and will assume operatorship upon the official withdrawal of Roc Oil on June 18.
Conditional on the joint venture making the drilling commitment, NZOG will pay AGL $3 million, but will now be assigned AGL’s 42.86% equity in the permit, taking NZOG’s total stake to 60%. TAG will retain the other 40%.
The permit is east of NZOG’s Kupe gas and oil field and is on trend with the onshore Rimu and Kauri fields. The Kaheru prospect lies in 25 m (82 ft.) of water, and is 8 km (5 mi) from shore. Figures released from the joint venture previously have estimated the mean recoverable reserves (unrisked) at 45 MMbbl of oil in an oil case; or 200 bcf of gas and 7.5 MMbbls of condensate in a gas case.