New Zealand Energy Corp. (CVE:NZ)(OTCQX:NZERF) has been awarded a new exploration permit as part of the annual New Zealand block offer, expanding the oil and gas company's onshore exploration land package in the Taranaki Basin by more than 66 square kilometres.
The Vancouver-based energy company said Tuesday it lodged a bid for Block TAR7 (PEP 54867) in a 60/40 joint venture with a subsidiary of Wellington-based explorer and producer New Zealand Oil & Gas (NZOG), bringing together two companies with "extensive experience" in the Taranaki Basin and the financial resources to advance the property.
Indeed, New Zealand Energy recently made its fifth oil discovery in the Taranaki Basin of New Zealand's North Island, and has transitioned from an explorer to an oil and gas producer, now having operations ongoing at seven wells, on three separate sites.
"The addition of PEP 54867 to our portfolio gives NZEC strategic control over a promising, unexplored block of land and strengthens our long-term growth plans," said CEO John Proust.
"NZOG brings decades of New Zealand technical expertise to the partnership and shares NZEC's commitment to responsible resource development."
The new block lies within a large underexplored part of southwest Taranaki, the junior oil and gas producer said, right next to the large Kapuni gas-condensate field, and contiguous with the south end of the company's Eltham permit.
With the Kapuni field to the east and a number of large oil and gas fields offshore to the west, the company noted there is a "high level of assurance" that petroleum is migrating through the block, yet there has been little exploration in the area so far.
The joint venture also has technical information on the block from exploration wells in adjoining areas, including the Kapuni wells to the east and the Te Kiri wells to the northwest, as well as 90 kilometres of 2D seismic collected on the property.
The Kapuni 3D seismic survey also extends 1,750 metres onto the permit from the east, giving control on the eastern edge of the property, New Zealand Energy said.
It added that the block also has "good access" to existing infrastructure, including oil and gas gathering lines and a production station.
The two parties in the venture have found leads in the Urenui, Mt. Messenger and Moki formations on the new block, and with 14 wells producing from the Kapuni anticline less than 5 kilometres east of the property, potential could also exist in the deeper Kapuni formation.
The first priority for the partners is to advance the property with continued reprocessing and interpretation of existing data, as well as through the acquisition of new 2D and 3D seismic data.
The two companies plant to acquire 70 kilometres of 2D seismic in the first 18 months, and 30 square kilometres of 3D seismic in the third year to gather enough data to make a drilling decision.
As a 60 per cent owner, New Zealand Energy will be the operator of the property, with New Zealand Oil & Gas contributing technical expertise and manpower, as well as funding 40 per cent of expenses.
New Zealand Oil & Gas already holds an interest in the Kupe gas and oil field and the Tui oil field in the offshore Taranaki Basin, and has additional exploration partnerships in New Zealand. It also recently expanded its portfolio to include properties in Tunisia and Indonesia.
New Zealand Energy’s property portfolio covers nearly 2.25 million acres of prospects in the Taranaki Basin and East Coast Basin of New Zealand’s North Island. A large chunk of its properties are located in the Taranaki Basin, which is situated on the west coast of the North Island and is currently the country's only oil and gas producing basin, producing roughly 130,000 barrels of oil per day from 18 fields.