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Hoki-1 well ready for drilling

Friday 5th March 2010

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The much-delayed Kan Tan IV oil rig is ready to start drilling the first of several wells offshore Taranaki, the operator, AWE, and 10% partner New Zealand Oil & Gas announced today.

The rig was initially due in New Zealand waters in November, but was delayed by a drilling programme in Bass Strait. It is now on location and preparing to drill the Hoki-1 exploration well, in exploration permit area PEP 38401, NZOG said in a statement to the NZX.

The prospect is one of the furthest offshore exploration wells undertaken in the Taranaki basin, and is targeting the oil potential of the Cretaceous North Cape reservoir sequence and the underlying Wainui sandstones, with a planned depth of 3,570 metres.

"Immediately following the Hoki-1 well, the Kan Tan IV will be used to drill at least two wells in the area surrounding the existing oil fields at Tui, where NZOG is a 12.5% partner."

Jkan Tan IV is then contracted to Origin Energy for the Korimako 1 and Tarapunga 1 exploration wells in the Northland basin.

NZOG was a partner in January in the drilling of another speculative prospect, the Albacore-1 exploration well to the north of the Pohokura field, using the ENSCO-107 rig, which is also active in New Zealand offshore waters this summer. That well was plugged and abandoned after failing to show commercial quantities of hydrocarbons.

Participants in Hoki-1 and PEP 38401 are: AWE (Operator) 50%; New Zealand Oil & Gas (through its subsidiary Petroleum Resources Ltd) 10%; OMV New Zealand Pty. 21.25%; Todd Petroleum Mining Co. 18.75%.

NZOG shares were trading up 0.6% at $1.58 at 2pm this afternoon.

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