29 Jul 2011

NZ Oil and Gas confident of drilling in summer

6:37 pm on 29 July 2011

New Zealand Oil & Gas Ltd (NZOG) has brought in a new partner on its Kaupokonui permit off the Taranaki coast and could drill an exploratory well as early as summer.

The listed company has reached an agreement with Australian exploration and development company Raisama, which will take a 10% stake in the permit and contribute 20% of the cost of the drilling the exploratory well.

NZOG already has a similar agreement with Peak Oil and Gas and says it wants to find more partners, to reduce the estimated $17 million drilling cost.

Chief executive David Salisbury says the company is in advanced negotiations to secure a drilling rig and is confident of drilling in summer.

Mr Salisbury says it is a relatively high risk, very high reward exploration prospect.

He says the company has been given until January to decide whether to drill the well or drop the permit.

Indonesia based partnership

NZOG has also formed a partnership with Indonesia-based Bukit Energy to pursue new projects there.

Mr Salisbury says Indonesia has a long history of oil production but until recently it's been under explored.

He says its partnership with Bukit Energy will enable it to build a significant Indonesian portfolio.

He says there are a number of opportunities under ongoing assessment and they expect that one or more should turn into concrete ventures in the near term.