But Genesis Energy chief executive Murray Jackson disputes such claims, saying Cardiff is “still a work in progess” and that it was too early to write the prospect off.

Late last week, operator Austral Pacific Energy finally announced – almost a year since spudding the Cardiff-2 well – that it had a real discovery and it was confident recompletion of the Cardiff-2A sidetrack well would prove commercial.

"We have a genuine discovery in the McKee sands, which have good reserve potential across the whole structure,” Austral chief executive David Bennett said at the time.

Bennett said he was confident recompletion would result in commercial flows from the McKee sands, the shallowest of the three Eocene-aged zones tested, and said he expected “substantially better” flow rates than those achieved so far.

The McKee sands, the main producing interval, had flowed only 1 to 1.5 million standard cubic feet per day of gas, primarily due to water production from the K1A sands.

But these low flows - which border on being sub-economic even at today’s gas prices of NZ$6.00-6.50 per thousand cubic feet - have several in the industry doubting Cardiff will ever fire up a power station.

“I would be stunned if Cardiff has the potential to produce the 50 million standard cubic feet a day necessary to fire a large power station,” one explorer told EnergyReview.net.

“Forget that Genesis has probably already sunk NZ$15 million into this well – what’s the cash cost of going forward?” asked another. “Sometimes, as a friend once told me, 'nothing destroys the expected net present value of a prospect like drilling a well'.”

Last year major downstream player Genesis Energy funded the drilling and testing of Cardiff-2, to a cap of NZ$15 million, in return for acquiring a 40% equity in respect of the deep, Eocene-aged petroleum rights in the permit and the right to purchase all gas from those reserves.

More recently Genesis announced it was planning a NZ$500 million 240-360MW gas-fired power station, to be operating from 2008, near the Kaipara Harbour north of Auckland.

Jackson told EnergyReview.net that testing had not yet finished at Cardiff-2A and that greater flows from the McKee and lowest zone, K3E sands, should be possible.

He also said Cardiff was only part of Genesis Energy’s gas portfolio, which included the possibility of importing LNG with fellow generator Contact Energy.

“We need to drill another 30 wells over the next three years before we can say anything definite about LNG, and we have not yet finished with Cardiff.”

Earlier this year Canadian independent consultants Sproule International estimated “probabilistic” gas in place exceeding 215 billion cubic feet (50%) and 341 bcf (10%), plus 12.8 million (50%) and 21.5 million barrels (10%) of condensate for Cardiff.

But now local explorers are saying they doubt Cardiff’s recoverable reserves will even reach the Sproule P2 estimate of 215 bcf.

The PEP 38738 deep partners are: operator Austral (25.1%), Cheal Petroleum (15.1%), International Resource Management (19.8%) and Genesis Energy (40%).