Kahu-1 well disappoints

Monday 19th July 2010 1 Comment

The second exploration well of a two-well programme in the highly prospective Tui oil and gas zone has come up without finding significant evidence of hydrocarbons, 12.5% field owner New Zealand Oil & Gas told the NZX this morning.

NZOG shares fell 3.2% on the news to $1.21, and had been falling since an announcement last Friday that the well was close to target depth, but which made no mention of hydrocarbon shows.

Operator and 42.5% owner AWE announced it had plugged and abandoned the Kahu-1 exploration well, having acquired wireline logs after reaching a depth of 3835 metres. "No significant hydrocarbons were detected within the target sandstone reservoirs," said AWE.

The Kahu-1 well was an exploration well within PMP 38158, located approximately three kilometres east of the producing Tui Oil Fields.

High hopes were held for both the Tui SW-2 and Kahu-1 wells, given their proximity to the producing Tui oil field, but instead the programme has made no significant discoveries while accruing substantial additional costs after problems with casing forced abandonment of the Tui SW-1 and the drilling nearby of the unscheduled Tui SW-2 well.

Businesswire.co.nz

Comments from our readers

On 19 July 2010 at 3:30 pm john said:

On 14/9/09 Forsyth Barr said the downside risk of the exploration wells was 8 cents a share or -4 to -5 per cent.The chance of at least one of the four wells succeeding was about 60 per cent.If all four wells disappoint then the share value should still be worth $1.52,before adding the extra value of the Kupe field increase.Tui is pumping slower than forcast,but no oil has been lost,therefor should'nt alter the price too much.The extra find at Kupe should cancel out the cost of the failures of the exploration wells.I guess my question is ; Why have NZOG shares dropped to $1.21,although it being on low volume