Australia's AWE Limited, Pan Pacific Petroleum and New Zealand Oil and Gas Ltd will drill a $ 40 million oil exploration well off the coast of New Zealand after they were unable to case a first well drilled at the site, NZ Oil and Gas said on Tuesday.
NZ Oil and Gas said in a statement that the new well would take up to 48 days to drill at the Oi prospect, in 120 meters of water about 40 kilometres offshore from the Taranaki region on New Zealand's North Island.
The joint venture would seal and abandon the first well, which was drilled to around 1,500 metres, the company said, adding that the new well would be drilled to a target depth of 3,881 metres.
AWE has given a pre-drill, un-risked best estimate prospective resource of 11 million barrels of recoverable oil. NZ Oil and Gas said it considered that the well had a 17 percent geological chance of success, and a 16 percent chance of commercial development .
Pan Pacific Petroleum holds a 50 percent share of the joint venture. AWE has a 31.25 percent stake, with NZ Oil and Gas holding the remaining share through a subsidiary.
In the event of a commercial discovery at the Oi prospect, Pan Pacific Petroleum said, the field may connect to and use spare capacity at the nearby Tui oil field, another joint venture project operated by the three companies.
New Zealand's Taranaki region is an oil and gas producing basin, where companies including Royal Dutch Shell, Austria's OMV and New Zealand's Todd Energy also have joint ventures to operate a handful of offshore fields.
(Reporting by Naomi Tajitsu)