PANCONTINENTAL OIL & GAS NL FARMS INTO WAITARIA PROSPECT IN WESTECH ENERGY NEW ZEALAND'S PEP 38335 PERMIT
Pancontinental Oil & Gas NL is pleased to announce that it has reached agreement with Westech Energy New Zealand to earn a 7.5% equity in PEP 38335 in the East Coast Basin of the North Island of New Zealand by contributing 10.0% to the US $1.327 million drilling costs of the Waitaria 2 well. Waitaria 2 is scheduled to be spudded in January 2001. Pancontinental will only contribute 7.5% to completion and testing costs. This agreement is still subject to final documentation and Government approvals.
The Waitaria prospect has been delineated by a close grid of modern 2D seismic data, and has been mapped by the operator, Westech, to have 4 way dip closure over an area of 6 square kilometres and vertical closure of 700 metres at a level immediately above the primary Mid-Miocene age Tunanui sandstone target reservoir. The operator has estimated that the potential recoverable reserves of the Waitaria prospect are 88 million barrels oil or 360 billion cubic feet gas.
PEP 38335 covers an area of 409 square kilometres and incorporates the regional city of Gisborne. Approximately 50 kilometres to the south-west, in the adjacent Westech operated PEP 33329, are the late 1998 Kauhauroa and Awatare gas discoveries, adjacent to the town of Wairoa. The Kauhauroa and Awatare gas discoveries are in Miocene reservoirs and recorded test gas flows of up to 11.5 million cubic feet per day.
The Waitaria 2 well will be drilled over 19 days to a total depth of 1829 metres, next to the 1997 Waitaria 1 well. Waitaria 1 failed to reach the objective Mid-Miocene Tunanui sandstone due to mechanical problems associated with abnormal pressure. Waitaria 1 encountered background gas levels up to 1% in spite of high mud weights. Ethane (C2) and Butane (C3) readings were consistently present at levels above 100ppm. The operator has interpreted that Waitaria 1, at its total depth of 1372 metres, was less than 30 metres from the top of the thick and regionally extensive Tunanui sandstone.
Pancontinental has a 29.725% interest in PEP 38330, the adjoining permit immediately to the north of PEP 38335. An exploration well is also planned in this permit prior to mid year 2001.
Participating interests in PEP 38335 (after earning) are :-
| Pancontinental Oil and Gas NL | 7.5% |
| Westech Energy New Zealand | 27.5% |
| Orion Exploration Ltd | 27.5% |
| Indo-Pacific Energy (NZ) Ltd | 25.0% |
| Sun Resources NL | 7.5% |
| Everest Energy Inc | 5.0% |
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Enquiries:
Andrew Svalbe
Tel: 08 9227 7178
Fax: 08 9227 9079
Email: svalbe@pancon.com.au
