27 Nov 2012

NZ Energy says Waitapu-2 well oil sought after

1:38 pm on 27 November 2012

Canadian oil explorer New Zealand Energy says the oil it's producing from its fifth discovery in the Taranaki Basin is highly sought after.

The explorer says its Waitapu-2 well is producing 325 barrels of oil and 800,000 cubic feet of natural gas a day. To date the well has produced nearly 1200 barrels.

The product is being trucked to the Shell-operated Omata Tank Farm, about 45 kilometres north of the site, and exported to Australia for refining.

New Zealand Energy executive director Bruce McIntyre says New Zealand crude tends to be very good quality.

Mr McIntyre says the company typically gets back about $US70 per barrel after paying royalty and taxes, and the company recoups its capital investment in a well about a year after it's producing.