A third oil and gas explorer is in the early stages of
assessing the Clipper prospect for deep-water test-drilling
off the coast of Oamaru, having committed to a large $5
million to $10 million shipborne seismic hydrographic survey,
beginning early next year.
New Zealand Oil and Gas (NZOG) will find out shortly if it
gets ministerial approval to become a 50:50 partner with
permit-holder Beach Petroleum, and subsequently become the
Clipper prospect's exploration operator.
Shows of oil and gas have been found from the test-drilling
of five holes in the area since 1970, around the prospects
Clipper, Cutter, Endeavour, Resolution and Galleon, but none
in commercially viable quantities, the last being Ocean
Patriot's one-hole programme off Oamaru in late 2006.
NZOG chief executive Andrew Knight said that, subject to
gaining approvals, earlier 2-D data would be reprocessed. The
company was in the process of contracting a seismic vessel
for a more definitive 3-D programme.
Oil giant Anadarko this week committed to a drilling
programme of up to $US100 million ($NZ127 million) off
Otago's coast in January, while Shell is in the final weeks
of considering a $US200 million programme off Otago, where it
believes it has a 30% chance of finding gas.
Mr Knight was reluctant to put a percentage estimate on
either the expected presence of oil or gas, but said the
science of data collating was working towards a minimum 20%
''In our portfolio [of prospects] across the country we try
to get to [a likelihood of] 20% drilling success. At present,
we are well below that [at Clipper],'' Mr Knight said when
The seismic survey was relatively large, covering 700sq km,
compared with recent Taranaki seismic surveys of 300sq km and
500sq km, and would cost $5 million to $10 million, Mr Knight
The survey was expected to take 20 to 30 days and had to be
completed by April, dictated by the likely weather
NZOG has eight prospects around the country, and Mr Knight
confirmed none of the work on them, either by seismic ships
or oil rigs, dovetailed with the estimated work programme for
Clipper, but there was the potential to collaborate with
other companies and align programmes to save money.
Although other wells had not found commercially viable
quantities of oil and gas, Mr Knight was bullish about the
area, saying he considered it a ''working hydrocarbon
region'', with oil seeps around Moeraki and other gas seeps
in the region.
''It [Clipper] is still very much a scientific concept at
present,'' he said.
NZOG's Clipper programme is to analyse the 3-D data during
the latter half of 2014. It would then update overall basin
analysis and make a decision by March 2016 on whether to
drill, or drop its permit holding, with a ''one-well''
programme pencilled in for between April to September that
Late last month, NZOG reported a 17% decline in operating
profit, from $70.5 million a year ago to $58.8 million.
Revenue, operating earnings, which include exploration costs,
and normalised profit fell as the offshore Taranaki Tui
oilfield entered its decline phase and the offshore Kupe gas
and oilfield was shut down for maintenance during the year.
Total revenue fell almost 15% to $99 million but operating
costs only fell 8.4%.
NZOG wrote off $15.1 million of exploration costs and $22.4
million of depreciation and amortisation, reporting earnings
before interest and tax of $21.3 million, down almost 47% on
a year ago.