Wellington, April 19 NZPA - Widespread Energy has plugged and abandoned its Kotuku exploration bore on the West Coast of the South Island, which it reported oil and gas flows at in March.

The decision to abandon before the well reached its target depth of 250 metres was made after the company experienced engineering difficulties with the casing in the well.

The well is in the petroleum exploration permit PEP 38526 area.

The Greymouth Star previously reported that people have known for years that the Kotuku area is oil-rich. A nearby creek is locally referred to as the Soda Spring, because gas bubbles through the surface.

New Zealand Oil and Gas, then Solid Energy held petroleum permits in the area before relinquishing them.

"We're not going to find millions of barrels (of oil) but there's a reasonable chance of finding something," Mr Castle has been quoted as saying.