Interest rises in New Zealand's East Coast basin
Exploratory drilling will be increased late next year in the onshore portions of New Zealand's East Coast basin as Trans-Orient Petroleum Ltd. begins its drilling program on its acreage there.
HOUSTON, July 24 -- Exploratory drilling will be increased late next year in the onshore portions of New Zealand's East Coast basin as Trans-Orient Petroleum Ltd. begins its drilling program on its acreage there.
The company has identified 50 prospects and leads over its two permits—PEP 38348 and PEP 38349—covering 2 million acres. It will target potential source rocks of Paleocene and late Cretaceous age in the Whangai formation, which is "exposed in outcrop in some areas, and greater than 10,000 ft down in others," said Dave Bennett, chief executive officer of Trans-Orient.
Bennett said, "[The Whangai] is now a forearc basin with lots of active structuration going on. Up until the Oligocene, i.e., through the time of deposition of Whangai and Wapawa sequences, it was a passive margin basin."
There are fewer than 10 wells drilled on Trans-Orient's acreage. The company is obligated, per its work program, to drill two wells by November 2009. Trans-Orient, however, plans to drill additional wells, but said the timing will depend on rig availability.
Bennett said drilling will "most probably" begin on PEP 38349, but added that a decision has not yet been made. The company has filed an application to extend this permit.
Later this year Trans-Orient intends to acquire additional 2D seismic data to enable better ranking of the prospects.
The prospects being initially targeted are all above 5,000 ft. Of particular interest to Trans-Orient are those in a fractured shale play within 1,500-3,000 ft. The play is similar in lithology to the Barnet and Bakken shales in the western US, Bennett said.
Trans-Orient's blocks lie adjacent to the Energy Corp. of America (formerly Westech Energy) block containing the Waitahora well, an offset of the 1998 gas discovery in the Kauhauroa-1 well, which flowed on test at 11 MMscfd of gas.
Energy Corp., which began exploratory drilling in the East Coast basin several years ago, in mid-July conducted a flow test of the Waitahora-1 well, which was drilled to about 1,350 m and encountered high reservoir pressure over a 70 m interval between 1,180-1,250 m.
The test revealed minor gas shows, Energy Corp. said. The company plans to carry out further analysis.
Taranaki is New Zealand's only producing basin, and Trans-Orient could soon hold producing assets there.
The company has an interest in acquiring the New Zealand assets of Swift Energy Co., Bennett said. Swift Energy is considering selling some or all of its New Zealand holdings, which consist primarily of two producing areas at Rimu-Kauri and TAWN (Tariki, Ahuroa, Waihapa, and Ngaere) in the onshore portion of the Taranaki basin. The assets include proved reserves estimated at 106 bcfe at yearend 2006 and production, which for 2006 totaled 13.5 bcfe. Swift also maintains and operates two natural gas processing plants, an oil processing plant, and oil and natural gas pipelines.
Concerning the island's Great South basin, Bennett said the area "does have the right geology." However, he said Trans-Orient's interest is in New Zealand's onshore basins.
The Great South basin off Southland recently has received increased interest. Two consortia, led separately by ExxonMobil Corp. and OMV AG, were awarded permits to explore four areas of the Great South basin. The two groups are expected to spend $1.2 billion exploring the basin over the next 5 years (OGJ Online, July 12, 2007).
Bennett, an international oil and gas veteran with more than 25 years of experience in New Zealand, said the Great South basin is a very challenging environment to work in. He compared it to the rough waters of the North Sea, adding that exploration of that basin is better suited for larger companies due to the risks involved.
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