New Zealand Oil & Gas has been granted a three-year extension on its drilling programme in the Canterbury basin.
The firm had been due to drill the Barque prospect – a 150 square-kilometre structure about 60 kilometres off the coast from Oamaru – by June 2020. A drilling commitment was due this week but has now been extended by Energy and Resources Minister Megan Woods until April 2022.
Chief executive Andrew Jefferies said the company and partner Beach Energy will keep a close eye on other permits in the region which have drilling commitments falling due in coming years.
“Progress in those permits will influence the future of the Barque prospect,” he said in a statement to NZX.
“The extended work programme in Clipper will allow a re-set of the marketing campaign to attract partners to the joint venture.”
Shares in the Wellington-based explorer last traded at 48.5 cents, and have fallen about 20 percent in the past year.
NZOG has spent several years seeking partners to drill Barque, which lies in about 800 metres of water and within a proven petroleum system. The structure in the southern part of the company’s Clipper permit – PEP 52717 – may have a resource in place equivalent to 11 trillion cubic feet of gas and about 1.6 billion barrels of condensate.
NZOG has tried to develop a coordinated drilling programme across the four permits in the area to improve the economics of bringing a rig to the region.
But all those permit holders have struggled to maintain international interest since the collapse in oil prices late 2014 and after the Labour-led coalition banned the offering of new offshore exploration acreage last year.
OMV last month applied for a discharge consent for a drilling programme in its more southerly permit – PEP 50119. That permit, south-east of Dunedin, was extended last year and requires a well to be drilled by mid-2021.
Beach and Discover Exploration need to drill a well in their permit immediately to the north by mid-2020.
NZOG has a well to drill in the most-southerly of the four permits – PEP 55794 east of Stewart Island – in 2021.