MELBOURNE�Magellan Petroleum Australia Ltd. has returned to New Zealand petroleum exploration after an absence of more than 30 years with a farm-in to permit PEP 38256 in the onshore portion of the Canterbury Basin in the country�s eastern South Island.
The permit extends over 5,600 sq km in virtually unexplored territory. Most of New Zealand�s petroleum activity and virtually all its commercial production has been in the North Island's Taranaki Basin.
Magellan has acquired a 20% working interest in the southern sector of the permit from participant AMG Oil (NZ) Ltd. for contributing to the cost of drilling a wildcat called Ealing-1. The well spudded Oct. 19 and is expected to reach total depth in early November. Drilling previously was expected to start Oct. 16 (OGJ Online, Oct. 13, 2000).
Following that drilling program, Magellan can either acquire a 20% working interest in the northern sector of the permit by contributing to drilling a second well, Arcadia-1, or reduce its working interest in the southern sector to 12%.
Ealing-1 is located about 120 km southwest of Christchurch. The well is expected to reach a depth of 1,750 m to evaluate the Upper Eocene age Homebush Sandstones. There are several secondary targets above and below this level. The structure is an anticline delineated by previous seismic acquired by the permit operator, Indo-Pacific (NZ) Ltd., which holds 20% interest.
Magellan says the Canterbury Basin is a foreland region, structurally analogous to the Rocky Mountain foreland basins of western Canada and mid-west USA. Stratigraphically it has sequences comparable to the Tertiary-age petroliferous basins of Southeast Asia.
Four previous wells have been drilled in the offshore sector of the basin, two of them making subcommercial gas/condensate discoveries. There have also been four earlier onshore wells, one of which recovered a small amount of oil. However, these were not drilled on seismically defined structures.
Besides Magellan�s 20% interest, AMG has 50%, Indo-Pacific has 20%, and Orion Exploration Ltd. owns the remaining 10%.
Magellan�s previous work in New Zealand included an extensive regional seismic survey in the offshore areas of both North and South Islands during the 1970s. However, the holdings were relinquished without any drilling taking place.