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Andarko Takes A $43m Punt On Canty Basin Well

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Feb 25 NZPA - Australian-based Origin Energy Ltd says it is selling a half share in its PEP 38262 offshore exploration permit in the Canterbury Basin to US independent company Anadarko Petroleum Corp.

Anadarko will pay the first $US30 million ($NZ43.6m) of the joint venture's costs to drill in water depths of 1000m, with further costs split 50:50, Origin said.

Anadarko also has an option -- which expires on April 8 - to acquire a 50 percent interest in an adjoining permit for $US100,000.

Origin's local arm, Origin Energy Resources NZ Ltd, has partnered with Anadarko New Zealand, a subsidiary of the US parent, which at its own cost processed a three dimensional seismic survey recorded by Origin last year over the large Carrack/Caravel prospect.

Origin has claimed that the Carrack/Caravel prospect, if established to be hydrocarbon bearing, could potentially hold recoverable resources equivalent to more than 500 million barrels of oil.

"Should this be a substantial find it could well turn Dunedin from the Edinburgh of the south to the Aberdeen of the south," a market analyst, Greg Easton from Craigs Investment Partners said.

According to Crown Minerals, the Canterbury Basin has a proven petroleum system, large mapped structures and a significant sub-economic discovery.

But as previous explorers have found, the true value of the prospect won't be known until it has been drilled.

The nearest well to the prospect is Galleon-1, drilled by BP in 1985 30km to the northwest. It flowed gas at 10.6 million cubic feet per day and associated condensate at 2240 barrels a day in testing of a marine-influenced coaly sediments, dating back to the late Cretaceous period over 65 million years ago.

Origin's executive general manager of geoscience and exploration new ventures, Dr Rob Willink, said it had been joined by a company with a proven capability operating in challenging deep water environments.

"Origin has been excited by the petroleum potential of the frontier Canterbury Basin, particularly the extension of this basin into deep water, since first commencing evaluation studies in the area in 2005," he said.

The Carrack/Caravel prospect covers an area of 390 square kilometres, bigger than the nation's largest gas field, Maui, which covers 160 square kilometres of the Taranaki Basin.

The joint venture is now shopping for suitable rig to drill an exploration well, most likely in 2011, possibly by sharing costs with other operators wanting to drill off the NZ coast.

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