Bonanza in sight, says NZOG

By CHRIS DANIELS

New Zealand Oil and Gas shareholders have again been tantalised by a presentation of optimistic geological prospects.

Deputy chairman Ray Meyer told shareholders at their annual meeting in Auckland yesterday that "some very interesting developments" for the company had occurred in the past few weeks.

He revealed details of another "lead" - a prospect off the Taranaki coast which has been given the name Ray, due to its stingray-like shape.

Ray, said Meyer, presented NZOG with the potential to "drill an oil target of massive size" once closer definition had been achieved with new seismic research, expected to be done in the New Year.

This offshore licence, which NZOG shares 50-50 with Austrian explorer OMV, covers an area estimated to contain 500 million barrels of oil - the "tantalising possibility of a very large oil field", said Meyer.

Another potentially massive prospect is a gas field at Mangatoa, which NZOG says may eventually yield enough gas to rival the now-depleting offshore Maui field.

Finance manager Gordon Ward said the company's dealings with the Department of Conservation were frustrating. It was holding up development of its West Coast coal mine development.

NZOG does not want to pay for more studies of the area until it receives some assurances from DoC that the company will be able to build an access road through a small section of its land. It owns a 72 per cent stake in Pike River Coal.

NZOG's last exploratory well in Taranaki, Opito 1, turned up dry and was plugged six months ago.

It will take advantage of the recent arrival in New Zealand waters of a semi-submersible drilling rig to drill a well in its Tui prospect.

The drilling, expected to take about 30 days, is designed to get to a depth of 3400m.

The aim is to intersect an area known as the "D sands closure", thought to be the remnant of an oil zone that once extended over the Maui field and Tui.

NZOG shareholders have been offered the chance to invest in new shares, in graduated amounts - $500, $1800, $3000 or $6000.

The shares will be issued at a 10 per cent discount to market and be free of brokerage and commission.

Nearly half NZOG's 7000 investors have fewer than 1000 shares each.