Matuku Well Disappoints (New Zealand)

New Zealand Oil & Gas has today said it believes its share price has been affected by the previously released drilling report that the primary target zone in the Matuku well in PEP 51906 offshore Taranaki has not encountered significant oil or gas shows.

The well is currently at a depth of 4307 metres and drilling ahead to a total depth of 4750 metres. Until driling is complete and testing analysed, geologists have not formed a complete view about the well or the implications for the play type in the Kahurangi trough, which was thought to be a source kitchen for a success case at Matuku.

No new information has come to hand that materially adds to information released on Tuesday, 14 January, when the company confirmed that Kapuni Group Farewell F Sands were found to be porous, but there were no significant gas or oil shows.

Chief Executive Andrew Knight says a negative result in any well is always much more likely than a positive result. “Most wells will not make commercial discoveries of oil and gas. Our company explores a portfolio of prospects in order to balance the investment risks around individual wells. In the near future, New Zealand Oil & Gas is involved in drilling in the Tui permit at Pateke and Oi, and next summer in the Kaheru prospect off South Taranaki.”

The Kan Tan IV began drilling operations on Saturday, 30 November. Matuku-1 is in 130 meters of water. Participants in PEP 51906 are OMV New Zealand (Operator) 65 per cent; Octanex 22.5 per cent; and New Zealand Oil & Gas 12.5 per cent.

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Press Release, January 16, 2014