The four young men have since agreed to pay $300 for the recovery of their dinghy after a night police said could have easily ended in tragedy.
Quick-thinking Queenstown residents rescued the intoxicated men by kayak about 11pm, about 20 minutes after they were heard screaming for help in Lake Wakatipu, after attempting to navigate from Kelvin Heights across the narrows of the lake to shore at Park St, at the Queenstown end of the Frankton walking track.
"Another 10 minutes and we could have had four fatalities out here," Sergeant Keith Newell, of Queenstown, said.
The men - all aged 18 or 19 - had been drinking at a Kelvin Heights property, when they decided to go by dinghy to Queenstown, Sgt Newell said.
One of the men, Harry Young, said they had used the dinghy to avoid potential problems with drink-driving, but the plan "just went terribly wrong".
"It's the closest I've ever come to death," Mr Young said, during a TV3 interview.
"I hope I don't come any closer."
Queenstown Lakes District Council harbourmaster Marty Black said the small dinghy had completed one trip across the lake, returned to Kelvin Heights and was about halfway across the lake when it "tipped", leaving the intoxicated males in the water.
Frankton Rd residents Pia Cairns, Giles Cooper and Sam Jasper told the Otago Daily Times at the scene they were watching television about 10.30pm when they heard "screams".
"We opened the window and heard someone yelling 'Help, help, help'.
"In the beginning, we thought someone was being beaten up," Mr Cooper said.
The trio rushed down the shore at Park St with an emergency blanket, which they quickly put around one of the survivors, then immediately called the police.
Nearby neighbours, who had also heard the cries for help, pulled out a kayak and rescued the four men, who were "hammered", Mr Cooper said.
"We saw one guy vomiting. I think it was a combination of alcohol and the cold."
Sgt Newell said the initial report was 13 people were in the lake after the sinking of a boat.
By the time police arrived, the men were about 70m offshore and had been in the freezing water for about 20 minutes.
"They are very lucky and very stupid."
Three of the four men were taken to Lakes District Hospital and treated for hypothermia - all three were vomiting in the back of the ambulance because of intoxication and shock, Sgt Newell said.
Mr Black said the teenagers were subjected to a "little session" yesterday morning, after which they agreed to pay for the costs of the dinghy's retrieval, which was picked up by a Kawarau Jet yesterday morning after the Queenstown Water Taxi failed to recover it on Saturday night.
"The accident was caused by their stupidity, so as part of the deal they agreed to pay [the $300 cost of recovering the dinghy] and also appear on TV."
