Thursday 2nd June 2011
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L&M Energy (LME) says New Zealand Energy Corp (NZEC) will become the operator of a joint venture drilling the Talon-1 exploration well in onshore Taranaki permit area 51151, known as the Alton permit.
Vancouver-based NZEC is promoting New Zealand as "an island nation of energy opportunity" and raising money to pursue oil and gas exploration here.
It is acquiring AGL Energy's 50% interest in permit area 51151. LME said today it was retaining its 50% interest in 51151, but would transfer operatorship to NZEC.
LME has entered an agreement that gives it a free-carry for expenses incurred in drilling the Talon-1 well.
In the event of a discovery, the agreement provided for the funding of completion costs up to $500,000 with any costs beyond that shared 50:50.
The LME share of expenditure being funded under the agreement was approximately NZ$1.75 million, including $250,000 of the completion costs.
The agreement with NZEC is conditional upon due diligence, a final agreement with AGL and obtaining the New Zealand ministerial consents required.
A previous statement by NZEC said that L&M had waived a pre-emptive right to acquire the AGL interest in the Alton permit.
The Talon-1 well was expected to be drilled in the third quarter of this year.
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