AWE yesterday said it was funding Shell’s 60% share of a 300km 2D seismic program in PEP 38481-482 in exchange for a 10% equity interest.
Following the successful acquisition and interpretation of that seismic, AWE had an option to fund Shell’s remaining 50% interest in an exploration well in either of the two permits to earn a further 30% equity in both permits. AWE must elect to participate in drilling the well by next December.
In January EnergyReview.net reported that Shell was again farming out its Western Platform interests amid rumours that last year’s farminee, Electro Silica Plc, had not fulfilled its work program obligations regarding these two offshore Taranaki permits nor its other New Zealand interests.
AWE managing director Bruce Phillips yesterday said PEP 38481-482 were immediately north and west of the Tui Area oil discoveries (where AWE has a 20% interest) and covered approximately 4282 square kilometres, increasing AWE’s acreage in the region by about 27%.
The permits were prospective for oil and gas within the lower part of the Palaeocene Kapuni Group, including the Kapuni F sands from which nearby Maui B oil flowed. Maui had produced about 200 million barrels of oil and condensate.
The Tui Area development was planning 20-30 million barrels of oil production from this same reservoir.
“This is further confirmation of AWE’s commitment to exploration in New Zealand and is commensurate with our view of the petroleum prospectivity of the Taranaki Basin,” said Phillips.
“We have been positioning the company to gain greater participation in the most exciting exploration plays in New Zealand. This transaction is another positive step in that direction and follows our recent announcement of increased equity in the nearby Hector area (in the adjacent PEP 38483) in conjunction with our alliance partner Mitsui.”
Phillips said the completion of this latest transaction would result in AWE holding equity in four contiguous permits covering most of the highly prospective oil trend highlighted by the recent Tui, Amokura and Pateke oil discoveries. These fields were currently progressing through FEED studies for commercial development by the PEP 38460 partners.
“AWE may be participating in up to five high impact exploration wells offshore NZ in the next 12 months, making AWE one of the most active exploration drillers in the country," he said.
“In addition, we expect to also be undertaking the development drilling activity for the Tui Area oil fields, subject to a successful development decision later this year. With a strong acreage position, an exciting exploration program and high calibre partners, we are optimistic about our growth opportunities in New Zealand.”
Current participants in PEP 3848-482 (before AWE’s earned interest) are Shell Exploration NZ (60%), OMV NZ (25%) and Todd Petroleum Mining (15%).