Wellington, Sept 30 NZPA - Pan Pacific Petroleum, which is 15 percent owned by New Zealand Oil and Gas, has signed a farm-in deal on a block in the Timor Sea.

A subsidiary of Pan Pacific Petroleum is buying a 15 percent participating interest in the production sharing contract (JPDA 06-103).

The terms include a partial refund of the farm-out parties' past costs and a contribution on their behalf to the costs of the first two exploration wells planned to be drilled.

Pan Pacific Petroleum said it was delighted to join the venture and to participate in the drilling of two attractive prospects in the short-term.

This was a very attractive area and there were a large number of prospects in the block.

The farm-in was a further step in the execution of Pan Pacific Petroleum's growth strategy, which included participation in selected exploration in proven basins, in the Southeast Asia region. JPDA 06-103 is located within the northern Bonaparte Basin, offshore northwest Australia.

The contract area is adjacent to existing oil fields, such as Laminaria and Corallina and the recent Kitan discovery.