Thought I should follow up on Tawhaki-1 that is currently being drilled down south.
NZOG has been applying for extensions on their permit obligations based on the geological de-risking that will occur if Tawhaki-1 discovers something. This is fair enough in my opinion and the least the govt should do after doing the dirty on NZ exploration.
Tawhaki stats are:
470 km2 structural trap, with 300m thick reservoir section.
Estimated cost is a bit less than $100 million, water depth ~1300m,
Gross mean recoverable oil 1 Bbbl. They have an oil AVO response so suspect they are desperately hoping they don’t find gas. Their commercial cut off is about 250 mmbbl
Suspect we should get the results in February.
Why does Tawhaki-1 matter to NZOG. While wells in Canterbury/GSB have a pretty high success rate with decent flows (from memory 4 from 12 wells had flows to surface) the basins are relatively shallow and may lack maturity, there are some thoughts that as many of the structures are inversion and formed later than the main charge event they may have been under filled. Barque and Toroa are pretty much self sourcing from nearby but require charge at the right time. A fully charged structure at Tawhaki-1 would significantly derisk sub basins to the north and south.
I think Tawhaki-1 is a free carry for NZOG. Both permits will be in hot acerage if OMV find anything.
Now in saying that Barque is a pretty average prospect. First identified in follow up work to BP, Shell, Todd drilling of Clipper-1 in the mid 80's it is likely to have a volcanic intrusion associated with the structure and therefore significant risks of elevated Co2 and reservoir alteration. It is near or on the shelf break and 40-50km from the coast. It will need to find formidable volumes to be anywhere near commercial.
Remember the history of the prospect:
I got lost trying to work it out but in the last 35 years of us knowing Barque the following companies have looked over Canterbury and decided not to drill Barque
SBPT (mid 80's)
Pacrim (1998)
Origin (Mid 2000's)
AWE (2010's)
Anadarko (2010's)
Tap Oil (mid 2000's)
Austral Pacific (mid 2000's)
Anschutz (2000)
Maxus Energy Corp (1991)
Lots of these companies even held the acreage that Barque was under and still decided not to drill. In a success at Tawhaki-1 exploration will likely move south not north to Barque and I am pretty confident that if Tawhaki-1 fails NZOG will never farm out Toroa and Barque.
I love a good drill an thrill but my experience tells me there is no margin of safety in the often zero sum game of exploration. I have run the figures and think anything under 60c I will start buying.
Hope something there may be helpful.