EnergyReview.Net a month ago reported that Swift Energy New Zealand had exercised its pre-emptive rights, as an existing PEP 38718 partner, to buy Shell's 50% stake in the permit for an undisclosed sum.
It was understood the pre-emptive strike scuttled a previously agreed deal between Shell and Greymouth Petroleum, which owns the Kaimiro gas-condensate field and is a partner in the Ngatoro oil field.
This week Swift Energy New Zealand confirmed it had reached agreement to acquire an additional 50% interest PEP 38718 from Shell NZ, through the existing pre-emptive right under the joint operating agreement.
Following the conclusion of this transaction, SENZ will sell a 20% interest in the permit to New Zealand Oil and Gas, leaving SENZ as operator, with a 50% working interest in the permit.
Swift Energy also said the new joint venture partners had recently approved the 2003 work program for the licence, which consisted of re-entering the Tuihu-1 well drilled in 2001 by then operator Fletcher Challenge Energy.
Company president and chief executive Terry Swift said from Houston that SENZ would either sidetrack Tuihu-1, or drill another well, depending on the condition of the well bore, to reach the targeted objectives and meet the work commitment to the New Zealand government for the permit in 2003.
FCE drilled Tuihu-1 to over 4500m but did not reach the identified seismic anomalies seen at these deeper intervals. Drilling was terminated as the well costs had reached the total authorised expenditure level.
"However, it is our belief that the Tuihu well was not drilled deep enough to reach the objective, the Kapuni and Tariki sands," said Terry Swift.
The Tuihu block is seen as one of several prospective permits along the eastern Tariki thrustbelt, others being Swift Energy's own Rimu-Kauri fields further south and the promising though frustrating Huinga block, PEP 38716.
NZOG believes Tuihu has the potential to contain up to 100 bcf of gas; with a good chance of early production should the second well strike commercial quantities of hydrocarbons.