Article – Businesswire

April 30 – New Zealand Oil and Gas is dipping its toe in the potential for oil and gas discoveries in Romania.

NZOG Targets Romania

April 30 – New Zealand Oil and Gas is dipping its toe in the potential for oil and gas discoveries in Romania.

Speaking to the NZX-listed company’s quarterly update, CEO David Salisbury said NZOG had paid 40,000 Euros for two years’ of study work in areas where the Romanian Government was expected to offer licence areas later this year.

That payment will rise to 235,000 Euros “if certain milestones are all met”.

With the third largest proven oil reserves in Europe, Romania was “an interesting hydrocarbon province”, Salisbury said. Proven reserves equivalent to 3500 Petajoules of gas and one  million barrels of oil are identified.

As a new member of the European Union, Romania had a lower royalties regime than New Zealand’s and the rule of law was well-established, although corruption was an issue.

Salisbury said he had some experience in Romania from his time with OMV, the Austrian oil major, and there had been some preliminary discussions with OMV about the potential to work together in Romania, “although that should not be overstated”, he said.

The Joint Study and Bid Agreement (JBSA) is with two Australian companies, Nexus Energy and AUDax.

The Kupe field production station was now 95% complete, pre-commissioning work was under way and commissioning was scheduled to commence in June, with completion in the September quarter.

Kupe holds a 15% interest in the Kupe field, operated by Australia’s Origin Energy.

There would be further investigation over coming months of the potential from three wells drilled in the south and south-west of the Kupe licence, where one oil reservoir and two oil and gas discoveries had occurred, but showed uncommercial quantities.

“There are some stacked reservoirs separated by fault blocks and the key Kupe stairwell formation continues to the south. There are some interesting looking prospects to the south of the Kupe central field area,” Salisbury said.

Production from the Tui field was levelling off as predicted, and the company was pleased with how closely the field was performing to expectations.

In the March 2009 quarter, Tui produced 2 million barrels (mmbbls), taking total production in the field since start up in July 2007 to 22 mmbbls, of which 2.75 mmbbls is Tui’s share.

Operating revenue for the quarter was $21.6 million, and $124.8 million for the nine months to date. That leaves NZOG with $208.7 million of cash on hand, of which $90 million is held in US dollars, all held with Australasian banking entities with strong credit ratings.

(BusinessWire)

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