KEY POINTS:
Trans-Orient Petroleum is to go ahead with a seismic programme during February in its East Coast Basin petroleum exploration areas, after promising early indications.
Canadian-based Trans-Orient has two onshore permit areas in the basin covering about 8750sq km - one north of Gisborne, while the other is mostly
south of Napier and Hastings. Both permit areas have coastal boundaries.
As well as conventional exploration targets, the areas also include an unconventional opportunity in fractured oil and gas shale formations.
The company has said those formations have many similarities to successful oil and gas shale projects now being developed across the United States.
Today Trans-Orient said exploration results from its unconventional play were positive.
International oil services company Core Laboratories had analysed core plugs from samples of the Waipawa and Whangai fractured shale formations provided by Trans-Orient.
Trans-Orient executive chairman Dave Bennett described the results as encouraging.
"These positive results can only enhance our ability to successfully and economically produce oil and/or gas from this major unconventional resource," he said.
Sproule International had also recently completed an independent assessment covering conventional exploration prospects, Trans-Orient said.
The report estimated the mid-range undiscovered resource potential on the company's prospects in the East Coast Basin permit areas were about 1.7 billion barrels of oil equivalent in place.
Trans-Orient said it was proceeding with a seismic programme to be acquired in February within the main Waipawa-Whangai shale fairway, and on other conventional exploration targets.
A 50km seismic programme budgeted at US$1.4 million ($1.8 million) had been laid out and would be managed by British-based RPS Energy.
That would identify optimal drilling locations over Trans-Orient's defined prospects.
Geochemical sampling during the past year had also revealed elevated levels of hydrocarbons at ground surface over certain features.
Dr Bennett said the seismic data collected would immediately be processed, leading up to a multi-well exploration drilling campaign.
"This initial drilling will target a number of potential sandstone reservoirs at depths under 1500m, as well as fractured shale targets," he said.
Trans-Orient said it also planned to investigate commercialisation of two shallow producing features in the northern permit area.
It aimed to survey the productive capacity of the 1912 Waitangi-1 well, which continued to actively produce high-quality oil from a sandstone reservoir at a depth of 210m.
At Te Puia Springs, south of Ruatoria, flow rate tests would be carried out on old shallow boreholes that had for many years collected gas with associated oil used for heating by the nearby hospital, and continued to actively flow natural gas.
"Given positive results at either of these projects, we can rapidly and cost-effectively proceed to profitable development," Dr Bennett said.
"Interestingly, these long-lived oil and gas seeps also demonstrate the production potential of the underlying Waipawa-Whangai fractured shales, which immediately underlie these primitive wells."
- NZPA
