PANCONTINENTAL OIL AND GAS NL TO EXPAND NEW ZEALAND INTERESTS
The Company announced today that it is to expand its oil and gas exploration interests in New Zealand by farming into the Waitaria Prospect in the East Coast Basin of the North Island of New Zealand.
Pancontinental will earn a 7.5% interest in PEP 38335 from Westech Energy New Zealand by contributing 10.0% of the cost to drill the 25 day Waitaria 2 well, scheduled to be spudded in January 2001, at an estimated drilling cost of US$1.327 million.
Pancontinental will then contribute 7.5% to any additional drilling, completion and testing costs.
Project operator Westech estimates that the potential recoverable reserves of the Waitaria prospect are 88 million barrels oil or 360 billion cubic feet gas.
Commenting on the release, Pancontinental's CEO, Mr Andrew Svalbe said: -
"The Agreement with Westech is consistent with Pancontinental's strategy to invest in areas where commercial discoveries have ready near term access to large potential markets. The development and growth of local industries in the area are restricted by high energy costs. Cheaper energy costs will stimulate the down stream processing of the pine plantation and power generation industries in the region. Value adding will be achieved by processing a larger percentage of plantation timber to higher value paper and associated products rather than export, which is now the case. Power generation costs, to service these and other industries in the North Island, will similarly be reduced by the availability of competitive energy sources. Our studies have shown these potential markets to be substantial.
Pancontinental is fortunate in having as its Joint Venture partners Westech Energy, Orion New Zealand Ltd and Indo-Pacific Energy (NZ) Ltd. Westech has demonstrated its capabilities as an operator in the East Coast Basin with the Kauhauroa and Awatare gas discoveries and it's ability to manage and operate exploration and drilling operations in this sedimentary basin. Orion is a leading New Zealand utility and gas transmission company.
This acquisition will complement Pancontinental's existing New Zealand exploration interests comprising PEP 38716 (Pancon 6.6%) in the onshore Taranaki Basin and PEP 38330 (Pancon 29.725%) in the East Coast Basin, adjacent and immediately to the north of the Waitaria PEP 38335 Permit.
Waitaria 2 will be the first of 3 wells to be drilled in Pancontinental's New Zealand permits over the next 6 months. Waitaria 2 is scheduled to spud in January 2001, on the rig completing an obligation well with another operator.
The estimated 40 day deepening of the Huinga 1 well in PEP 38716 Taranaki basin, is planned for the first quarter 2001, following the release of the rig by Swift Energy from the Rimu/Kauri appraisal project. The operator, Bligh Resources, has estimated that Huinga has total potential recoverable reserves of 297 billion cubic feet gas and 17 million barrels condensate in the Tariki and Kapuni sandstone reservoirs.
An exploration well is also anticipated in PEP 38330 in early second quarter 2001 following the interpretation of the recently acquired Waigaromia seismic data. The larger Arataha and Pauariki prospects in PEP 38330 have potential recoverable reserves of 430 BCF or 264 million barrels and 230 BCF or 208 million barrels respectively, similar in size to the prospect in PEP38335 and PEP38716."
Enquiries:
Andrew Svalbe
Tel: 08 9227 7178
Fax: 08 9227 9079
Email: svalbe@pancon.com.au
