The company, however, will relinquish its West Kupe licence.
In its latest quarterly report released yesterday, NZOG said it had spent $NZ11 million (almost $A9 million) on the $375 million Tui and $980 million Kupe developments in the three months to June 30.
The Wellington-headquartered company said it still expected the semi-submersible Ocean Patriot rig to start a seven-well exploration and development drilling program off Taranaki in the last quarter of this year.
That program was two development wells in the Tui oil pool, one in each of the Amokura and Pateke pools, and three exploration wells – Tieke and Taranui in the Tui Area mining licence PMP 38158, and Hector in nearby PEP38483.
NZOG said it was also embarking on an onshore-offshore coastal “transition zone” seismic survey of the Felix-Opito area in licence PEP 38729, following positive results from the onshore seismic refraction data recorded in February.
That had supported the presence of viable exploration targets in Felix-Opito, located at the northern end of the Eocene-aged Kapuni Group beach sands that formed prolific, proven hydrocarbon reservoirs further south in the Taranaki Basin.
Analysis of the results of the transition zone survey was expected to provide better definition of potential hydrocarbon volumes and result in the identification of a final drilling location (either offshore or onshore), with a possible well planned for early 2007.
NZOG also said after further consultations with Crown Minerals, the relatively high risks associated with drilling the Taitapa prospect, and major increases in rig costs, it had relinquished its West Kupe licence PEP 38484.
Tui project design and construction activities are continuing at several locations worldwide, with NZOG’s $37.5 million Tui development finance facility with the Commonwealth Bank of Australia being utilised to the extent of $10.4 million, excluding an $8.75 million contractor support guarantee.
Oil hedging undertaken in respect of the Tui financing facility stood at 897,000 barrels, being 25% of NZOG’s share of Tui’s proved and probable reserves. The hedging comprised a combination of put options at $50 per barrel and a “zero cost collar” at $50 put/bbl and $87 call/bbl, respectively.
The Tui partners are operator AWE NZ (42.5%), Mitsui E&P NZ (35%), NZOG (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%).
The PEP 38483 partners are operator AWE NZ (44.317%), NZOG (18.864%), Mitsui E&P NZ (22.728%) and Pan Pacific (14.091%).
