Oil explorer quits onshore well in East Coast Basin

By FIONA ROTHERHAM

Indo-Pacific Energy says the plugging and abandonment of the Whakatu-1 well about 550m short of its planned target depth is "disappointing but not fatal" to its exploration plans in the onshore East Coast Basin.

The Whakatu-1 exploration well is located in petroleum exploration permit 38328, just south of the area where Denver-based Westech Energy made a significant natural gas discovery last year.

This discovery sparked increased attention from international exploration companies on the lightly explored Eastern Basin.

Indo-Pacific is the largest holder of onshore exploration rights in New Zealand, controlling interests in about 1.5 million hectares in the eastern basin alone.

Drilling begun late last month on the Whakatu-1 well encountered an abrupt change in geological age at a depth of 1510m.

This meant that any deeper reservoir targets were unlikely.

Interests in the permit area are: Indo-Pacific 40 per cent, Boral Energy Resources 37.5 per cent and Trans Orient Petroleum 22.5 per cent.

The joint venture partners are now reviewing the other exploration prospects and leads in the permit area before deciding on further exploration.

Indo-Pacific says it remains optimistic of the area's discovery potential.

Exploration consultant Kerry Mills said another well, Kereru, was plugged and abandoned two years ago in the eastern basin by Indo-Pacific after some hydrocarbon shows.

Last week the North-American-based company announced it was restructuring oil and gas assets jointly held with Trans Orient.

Both are listed on the Over The Counter Bulletin Board and have the same principal shareholder.

Trans Orient has agreed to transfer all its oil and gas assets to Indo-Pacific in return for well-head royalties, some Indo-Pacific shares and warrants plus other consideration.

Under the agreement, Trans Orient's oil and gas interests in licences and permits in New Zealand, Australia and Papua New Guinea are being sold at a 20 per cent premium to book value of $US3.4 million, less $US1 million Trans Orient owes on the assets.

The transaction is to be completed by February 29, subject to an independent fairness appraisal.