Exploration lull as oil and gas results analysed

The drill ship Noble Bob Douglas departed New Zealand waters last weekend. The ship has left its drill site north of Dunedin and is bound for Argentina. Photo supplied.
The drill ship Noble Bob Douglas departed New Zealand waters last weekend. The ship has left its drill site north of Dunedin and is bound for Argentina. Photo supplied.
Oil and gas exploration work off Otago's coast is entering a two-year lull as the major players analyse results from recent seismic hydrographic tests and from Anadarko's hole 60km north of Dunedin.

Anecdotally, the flurry of recent oil and gas activity has surfaced in a regional economic confidence survey in Otago.

In the latest Westpac McDermott Miller regional economic confidence survey for March, households expecting good economic times in the region in the year ahead rose sharply from a net negative 1% in December to a net 29% positive in March.

Westpac chief economist Dominick Stephens said ''Oil and gas exploration in the [Otago] region has been a hot topic and this may have bolstered people's view of the outlook for economic prospects for the region''.

The survey showed Otago consumer confidence rose from 107.4 in December to 115.7 in March, but was still sitting below the national average of 121.7, Mr Stephens said.

While drill ships or rigs may not be around the coast again for a couple of years, shipborne hydrographic seismic surveying work is still under way.

Anadarko's drill ship Noble Bob Douglas has now headed overseas, but at present the seismic survey vessel Aquila Explorer is still operating south east of Dunedin, on behalf of Shell.

It is expected to take several more weeks to complete its two-dimensional survey, within a 21,200sq m area, with results not fully analysed for about a year.

In early January, Shell and its joint venture OMV and Mitsui said they would drill an exploration well in the northeast part of its Great South Basin licensed area, possibly in early summer 2016.

Listed New Zealand Oil & Gas was awarded three new offshore permits during the 2013 block offer, by Government permitting agency New Zealand Petroleum and Minerals.

Aside from Taranaki, it has Toroa in the Great South Basin/Canterbury Basin, where NZOG is partnered with Woodside Petroleum.

It has also been awarded the Galleon permit, next to its existing Clipper interest, off the coast from Oamaru.

NZOG has recently said its spending on exploration and evaluation was up significantly to $23.747 million, as it expanded its portfolio and was involved in more exploration activity, compared with a year ago.

While the exploration boost undercut profit for debt-free New Zealand Oil and Gas, as at late February it retains a healthy $164.2 million cash war chest.

simon.hartley@odt.co.nz

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