The NZX-listed mid-cap yesterday released an updated company profile in which it outlined its growth strategy to 2012, including a goal of increasing its reserves to at least 25 million barrels (MMbbl) of oil and increasing production to about 2MMbbl per annum.
Wellington-based NZOG had no production until earlier this year when the offshore Taranaki Tui Area oil field started producing. There have since been eight export shipments, involving 2.4MMbbl of Tapis-quality crude from the Tui, Amokura and Pateke oil pools.
NZOG said it expected its June 2007-08 production to be almost 1.2MMbbl, entirely from its 12.5% stake in the $US269 Tui development, though in the next year that would drop to just over 600,000 barrels.
However, the following year (June 2009-10) would see total NZOG production rocket to just over 1.5 million barrels of oil equivalent (MMboe) as NZOG’s other producing offshore Taranaki asset, the Kupe gas-condensate field came onstream, with its condensate and rich natural gas liquids, including liquefied petroleum gas.
That year would also be the first of NZOG’s scheduled new production, with about 200,000 barrels coming from as-yet undefined acreage. Declining commercial flows from Tui were expected until at least 2017, the company said.
For the following five years at least, the company’s annual petroleum production was scheduled to be almost 2MMboe, with increasing contributions from new production sources.
NZOG said it believed New Zealand still had good remaining prospectivity for oil and gas, and that it would be looking for growth opportunities through exploration, asset purchases or corporate acquisitions.
Managing director David Salisbury described his company’s growth strategy as ambitious but achievable.
“We have essentially finished our recruitment process and will shortly have 17 staff, which will enable us to be more aggressive in our E&P strategies,” he told PetroleumNews.net.
“We are gearing up and looking for growth off the platforms of Tui and Kupe.”
Salisbury said the first phase of that expansion strategy was “the easier wins” – near-field exploration targets at both the Tui Area and Kupe.
He said the company’s present reserves were about 14MMboe but another reserves upgrade for Tui was possible, although that was a matter for operator Australian Worldwide Exploration.
AWE recently upgraded the 2P (proved plus probable) reserves of the Tui project by about 15%, to 32 million barrels of recoverable oil.
Salisbury said NZOG was still waiting on a decision to sidetrack the Tieke-1 well, which encountered minor hydrocarbon shows when drilled late last year. The second near-field Tui appraisal well, Taranui-1, was probably not commercial.
However, there were multiple near-field exploration targets for Kupe, including the Denby A, B, C and D prospects and the previously deemed sub-commercial “discoveries” of Toru (gas), Kupe South-4 (gas) and Kupe South-5 (oil) – all awaiting further evaluation.
Another Kupe near-field target, Momoho, is scheduled to be drilled by the jack-up Ensco Rig 107 in the second quarter of 2008.
“Those are the easier wins; beyond that we quite clearly have ideas and are gearing up to pursue them,” Salisbury told PNN.
There were also the Matuku, Toke and Kakapo leads in offshore Taranaki licence PEP 38499, where more seismic survey work and geophysical studies may move those mature leads into drillable prospects.
As well, there was the Felix oil-gas target in the onshore-offshore northern Taranaki licence PEP 38729, where farm-out negotiations were underway and a wildcat well was planned to be drilled in mid-2008.
Salisbury said in the medium term, NZOG could move beyond Taranaki or even New Zealand if opportunities arose.
The Tui partners are operator AWE (42.5%), Mitsui E&P NZ (35%), New Zealand Oil & Gas (12.5%) and Pan Pacific Petroleum (10%).
The Kupe partners are operator Origin Energy (50%), Genesis Energy (31%), NZOG (15%), and Mitsui E&P NZ (4%).