New Zealand Oil & Gas (NZOG) has announced its second upgrade to estimated reserves in six months to its offshore Kupe oil and gas field, in Taranaki.
NZOG chief executive Andrew Knight said the reserves upgrade was positive news and the increase provided additional volume from within the existing development.
"It also provides further security that contracted volumes can be met without needing significant additional capital,'' Mr Knight said in a statement.
Last October Kupe estimated reserves were upgraded by 34.7% and this week's upgrade added a further 15.29%, from 5.22million barrels of oil equivalent to 6.02million barrels.
Origin Energy is the Kupe field operator and 50% shareholder, Genesis Energy holds 31%, NZOG has 15% and Mitsui 4%.
Craigs Investment Partners broker Chris Timms said of the new total 6.02 million barrels of oil equivalent, the gas component rose 16.5%, oil was up 8.3% and lpg up 18.3%.
"This represents a 10% upgrade to total reserves, with undeveloped reserve estimates unchanged,'' he said.
He noted that in increasing overall production, that would not require any significant further capital expenditure.
In addition to the upgrade, Mr Knight said technical work was nearing completion to assess options for developing undeveloped reserves of 3.2million barrels, which is NZOG's percentage share.
On the undeveloped reserves estimated at 3.2million barrels equivalent, Mr Timms expected NZOG to announce a final decision later in the year.
Despite the plunge in global oil prices, Mr Knight has said in recent months NZOG had enough cash from its long-term gas contracts to sustain the business.
In a drive to save cash NZOG had slashed corporate costs, minimised exploration costs and will delist from the ASX late next month.
The upgraded Kupe estimate was based on more than six years of production data and full analysis of reservoir simulation models provided by Origin Energy.
