Kowhai reserves 'significant'

Greymouth Petroleum says it hopes to have what it describes as "significant" gas and condensate flows from its Kowhai field in Taranaki on the market by the end of the year.

The privately owned company said it would announce more details of the reserves soon.

Last year Greymouth announced subsidiary Petrochem had successfully flowed gas from the Matapo sandstone and had applied for a petroleum mining permit to produce from the Kowhai field onshore.

The announcement on gas sales comes after Greymouth won a High Court battle against arch-rival Todd Energy involving royalties and how they could bear on use of the Kowhai field. The fight stemmed from the purchase of Swift Energy's 80 per cent stake in Kowhai to Greymouth companies, announced in 2008.

Todd had sought a judicial review of the Government's approval of the transfer of Petroleum Exploration Permit (PEP) 38742 by Swift Energy to four Greymouth companies.

Justice John Wild said both Greymouth and Todd bid when Swift put PEP 38742 up for sale. Days after Greymouth's successful bid Todd acquired GXL, which held a 5 per cent overriding royalty interest in petroleum produced from a specified part of the permit area of PEP 38742.

Evidence indicated that Todd was using this royalty interest to try to prevent, or at least to obstruct and delay, Greymouth's use of the permit area, the judge said.

He found that Todd's assertion that then-Minister of Energy David Parker acted improperly in approving the transfer of Swift assets to Petrochem did not stand up.