NZOG takes 10% of Hoki prospect

Thursday 9th July 2009

New Zealand Oil & Gas has bought a 10% stake in the offshore Taranaki Hoki oil prospect, which is due for drilling this summer by NZOG's Tui field partner, AWE.

AWE is bringing the semi-submersible drilling rig Kan Tan IV to New Zealand later this year to drill a series of wells, including in the Tui prospect.

"NZOG’s internal assessment is that Hoki has the potential to be a large oil-bearing reservoir," said NZOG managing director David Salisbury. "An additional attraction is that the prospect is 'drill mature' and that drilling arrangements are already in place."

The company is not disclosing what it paid Austrian oil major OMV for its stake, but is committing around $10 million to drilling in Exploration Permit 38401,which lies approximately 150km northwest of New Plymouth.

Subject to partner and ministerial approval, the new participating interests will be:

AWE New Zealand Pty Ltd (Operator) 50%

OMV New Zealand 21.25%

Todd Petroleum Mining Company 18.75%

New Zealand Oil & Gas 10%

Hoki is the largest untested prospect in the western margin of the Taranaki basin. The Hoki-1 well will test both the primary Island Sandstone reservoir and a secondary target in the North Cape formation. NZOG now has interests in five permits in the Taranaki Basin and one in the Canterbury Basin.

NZOG traded barely changed at $1.51 a share after the announcement, but has experienced a 23% gain over the course of the year.

Businesswire.co.nz

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