New Zealand Oil and Gas says it's unsure what it will cost to drill two more wells to extend the life of the Tui oil field.
The listed company and the field's other owners have decided to drill a development well, Pateke, to lift production.
The partners will drill a second, exploration well in the Oi prospect in the northern part of the permit that may hold between 12 and 15 million barrels of oil.
Drilling is expected to start later this year, and New Zealand Oil and Gas chief executive Andrew Knight says the operator, AWE, is still negotiating with the rig operator over the cost.
The company made $18.3 million in the three months to December, a decrease of 27% compared with the same period a year ago.
Two-thirds came from its interests in the Kupe gas field, and the remainder from the Tui oil field.
New Zealand Oil and Gas has cash reserves of $209 million, and has reduced debt to $38 million, which the company says will be fully repaid by March 2015.
Mr Knight is cautiously optimistic it can attract other explorers to invest in the southern offshore Taranaki Kakapo permit to reduce its 90% stake, saying it's talking with a number of interested partners.