Fletcher increases exploration stake

By FIONA ROTHERHAM

Fletcher Challenge Energy has increased its exploration acreage in buying a 30 per cent interest in a Taranaki-based permit.

The purchase comes as Fletcher Energy's share price yesterday took a tea break from its recent surge, closing down 8c at 756c.

The stock has risen from a low of 458c in May to a high of 765c earlier this week.

Interest has been so high that the exploration company has an updated share price featured on its website home page.

Analysts value the company at between $9 and $11 a share.

As part of its exploration portfolio restructuring, Fletcher Energy has agreed to acquire seismic data in PEP38728 in exchange for a 30 per cent interest from Marabella Enterprises, a wholly owned subsidiary of Brisbane-based Bligh Oil.

The permit is between the recently discovered Rimu field and Fletcher Energy's Waihapa producing field in Taranaki. Marabella will continue as operator with a 40 per cent interest while Australian-based Origin holds 30 per cent.

Bligh has been a minority partner with Fletcher Energy in the Tawn field since 1985 and in the past two years has expanded its investment in Taranaki.

In a related deal, Marabella will acquire a 10 per cent interest in PEP38716 from Fletcher Energy.

This block, east of the Tariki field, contains the Tuihu prospect to be drilled later this year.

Last month, Fletcher Energy withdrew from its joint venture with New Plymouth-based Spectrum Exploration in the deepwater exploration licence off Taranaki, PEP38462, just before a commitment to drill a well was required.

Fletcher Energy has also expanded its Canadian exploration acreage, acquiring 50,500ha in Saskatchewan for $C23.25 million ($34.16 million).

It plans to bring 12 heavy oil wells into production next month.