A British-based gas exploration company is to start producing from an oil and gas field in Taranaki.
Kea Petroleum says testing at its Puka-1 site near Eltham has shown the oil and gas reservoir is large enough for commercial production, at up to 310 barrels of oil a day and 1.8 million cubic feet of gas.
The company is considering how to increase production from the field and is speeding up plans to drill a second well, Puka 2.
The company, which is listed on the secondary AIM board in London, intends to commercialise the field as soon as possible.
Kea is a minor player in the Taranaki oil and gas industry and has been exploring there for the last few years.
It says the field near Eltham is relatively small, but will be easy to produce from as it is land-based and the oil and gas flow freely.
Kea's managing director Richard Parkes says oil production will begin soon, and gas production will depend on whether it is economic to transport it.
He says the find is significant for the firm, as it takes it from being an exploration company to an explorer and producer.
Mr Parkes says it hopes to get to the order of 2,000 barrels a day.
The encouraging test results from the first well have also sparked plans to drill a larger well, 800 metres deeper, at the same site.
Mr Parkes says more staff will be taken on when production starts but it is too early to say how many.
Find exciting, says industry
The association representing the oil and gas industry says the discovery of a commercially viable oil and gas reservoir in Taranaki is something to celebrate.
Petroleum Exploration and Production Association chief executive David Robinson says although the find is relatively modest, it is not something that happens every day.
He says production from the site will help boost employment in the region.