NZOG has identified Tunisia as an area of focus for future growth.
Why Tunisia?
During NZOG's search for suitable overseas opportunities, our attention has returned repeatedly to Tunisia due to its combination of good prospectivity, established exploration and production activity levels, reasonable fiscal terms, and relative ease of doing business.
Cosmos
In December 2011, NZOG executed an agreement to take a 40% stake in a Tunisian concession that contains an oil field which could be brought into production as early as 2014. NZOG paid a US$3m contribution to past costs, securing the right to participate and earn an interest in the development of the Cosmos concession.
The Cosmos Concession lies in the Gulf of Hammamet, offshore Tunisia. NZOG's partners are Storm Ventures International, a wholly owned subsidiary of Toronto exchange-listed Chinook Energy Inc (40% and Operator) and Tunisia's state-owned oil company L'Enterprise Tunisienne d'Activites Petrolieres (ETAP) (20%).
The concession contains an oil discovery, Cosmos A, that is being assessed for development. There are also several adjacent prospects and leads, which if proven, would be accessible using the same infrastructure. The Cosmos concession also contains several other potential exploration targets.
Independently evaluated proved and probable oil reserves of 6.3 million barrels have been attributed to the Cosmos South block, with additional potential from adjacent lobes. Further work on assessing the recoverable oil resource, along with front end engineering design work, will take place ahead of a final investment decision later this year.
If an oil field development is agreed to by the partners, NZOG will pay the first US$19m of Storn's share of the development costs. First oil production could be achieved by 2014.
Diodore
In 2011 NZOG was granted a permit in the Mediterranean's Gulf of Gabes, an established oil and gas producing region off the coast of Tunisia.
A two year prospecting permit has been awarded, with priority rights to apply for a subsequent four year exploration permit.
The Diodore permit extends over an area of 1,200 sq km in the relatively shallow (<100 metres) water depth of the southern Gulf of Gabes. The permit is surrounded on all sides by discovered and producing oil and gas fields.
It is a very productive region and adds diversity to NZOG's exploration portfolio through access to lower risk opportunities.
NZOG's work programme under the prospecting permit requires the acquisition of at least 350km of new 2D seismic data. We expect to shoot this seismic in February 2012 and after analysing this new data be in a position to commit to an exploration well, which could be drilled as early as 2013. We anticipate bringing in at least one other partner ahead of drilling, to manage our financial exposure.
