Texan oil company Anadarko will start test drilling off the Otago and Taranaki coasts next summer after having the permits since 2008.
It plans to drill two exploratory wells in the Canterbury Basin and one in the Taranaki Basin in the hope of finding natural gas and oil.
Exploration permits initially last for five years, but Anadarko has been granted an extension for Canterbury till 2015 and till 2016 for Taranaki.
Corporate affairs manager Alan Seay says the company had setbacks in trying to hire a rig, but one has now been secured and is under construction in South Korea.
It will cost $US100 million to hire the rig and a further $US1 million per day to operate it.
Each well is expected to take 30 to 40 days to drill.
There are no precise locations yet for the drilling, but the Canterbury Basin site will be 60km offshore at a depth of 1100 metres.
The Taranaki well will be 150km offshore and in 1500 metres of water.