Oil discovered at Pateke, off Taranaki

1.00pm

New Zealand Oil & Gas (NZOG) said today a 13 metre oil column has been discovered while drilling in the Pateke-2 well off the coast of Taranaki.

"Log character is the same as in the previous nearby wells at Tui and Amokura, indicating excellent reservoir quality," the company said in a statement to the stock exchange.

NZOG said the oil-water contact in Pateke-2 was at the same depth as in the Amokura-1 well, 4km to the south, which implied that both wells have drilled into the same pool of oil.

The full size of the Pateke-Amokura field won't be known until post-drill studies have been completed in 6-8 weeks time, but NZOG said the field was likely to be developed in the near future, with a target of first oil production within 24 months.

Drilling at Pateke-2 has reached a total depth of 3861 metres.

Pateke is the third prospect to be drilled in NZOG's drilling programme with its joint venture holders of the PEP38460 licence.

Once drilling at Pateke is complete the joint venture plans to drill the Kiwi prospect, which is also approximately 4km from Amokura.

NZOG holds a 12.5 per cent stake in PEP38460 through subsidiary Stewart Petroleum Company Limited. Other partners in the venture are New Zealand Overseas Petroleum Limited with 45 per cent, WM Petroleum Limited, a wholly owned subsidiary of Pan Pacific Petroleum NL, with 10 per cent, AWE New Zealand Pty 20 per cent and Mitsui E&P New Zealand Limited with 12.5 per cent.

NZOG shares were up 6 cents at 75 cents at midday today, having traded between 31 cents and 77 cents over the past 12 months.

- NZPA