Australia is not the only land down under that is endowed with natural resources, as the oil and gas industry moves to explore and develop promising areas in New Zealand in an attempt to supply future energy needs.

IN PICTURES: 10 Ways To Prepare For Nature's Worst

Natural Gas Fields Started Up In The 1960s and 1970s
Royal Dutch Shell
(NYSE:RDS.B) is the most established major oil company currently producing in New Zealand, with production from the Kapuni and Maui natural gas fields that were started up in the 1960s and 1970s. The Pohokura natural gas field was the most recent startup and began production in 2006.
The New Zealand government is actively leasing exploration areas to oil companies and holding lease auctions on a regular basis. Two are scheduled to close in 2010.

Exxon Mobil (NYSE:XOM) was awarded a block in the Great South Basin in a 2006 auction. This basin is located offshore, and eight exploratory wells were drilled here in the 1970s and 1980s, with four finding hydrocarbons.

Exxon Mobil has completed seismic work and is currently seeking equity partners to take part of its 90% interest in this block.

Massive Natural Gas Project in Australia
Exxon Mobil and Royal Dutch Shell are also involved with a massive natural gas project in Australia that is being operated by Chevron (NYSE:CVX). The Gorgon Project is set to cost $43 billion AUD and will consist of three Liquefied Natural Gas (LNG) facilities, a domestic gas plant and a carbon dioxide plant. The field contains an estimated 40 trillion cubic feet of natural gas.

Among the independent U.S.-based exploration and production companies, Pogo Producing Co. was awarded several blocks in New Zealand and was set to spud a well in early 2007. Plains Exploration and Production (NYSE:PXP) purchased Pogo Producing in late 2007, and the company does not mention any exploration or properties in New Zealand in its marketing literature.

Both Conventional And Unconventional Resources
The area has both conventional and unconventional resources present, with shallow Miocene sands that are prospective and two deeper oil-bearing shale formations called the Waipawa and Whangai Shales. TransOrient believes the two shales are comparable to the Bakken Shale in North Dakota, although much more study will be needed before its potential is known.

A private company called Energy Company of America also has interests in New Zealand, with some acreage near TransOrient in the East Coast Basin. That company drilled the Kauhauroa 1 in 1998 and reported production of 11.5 million cubic feet per day of natural gas. The company redrilled the prospect in 2007, but the results have not been made public.

Energy Company of America is also exploring offshore and spud a well in late November 2009 in the Taranaki Basin. The company is leasing the Ensco 107 rig from Ensco International (NYSE:ESV) to target three separate zones in the basin.

Frontier Places Like New Zealand In The Industry's Future
If the world is ever to escape the predictions of disaster that many are forecasting as oil production peaks in the near future, then frontier places like New Zealand are where the industry should be putting some of its dollars. (To learn more, see our Oil And Gas Industry Primer.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Personal Finance

    A Day in the Life of an Equity Research Analyst

    What does an equity research analyst do on an everyday basis?
  2. Mutual Funds & ETFs

    ETF Analysis: PowerShares S&P 500 Downside Hedged

    Find out about the PowerShares S&P 500 Downside Hedged ETF, and learn detailed information about characteristics, suitability and recommendations of it.
  3. Mutual Funds & ETFs

    ETF Analysis: ProShares Large Cap Core Plus

    Learn information about the ProShares Large Cap Core Plus ETF, and explore detailed analysis of its characteristics, suitability and recommendations.
  4. Mutual Funds & ETFs

    ETF Analysis: iShares Core Growth Allocation

    Find out about the iShares Core Growth Allocation Fund, and learn detailed information about its characteristics, suitability and recommendations.
  5. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI USA Minimum Volatility

    Learn about the iShares MSCI USA Minimum Volatility exchange-traded fund, which invests in low-volatility equities traded on the U.S. stock market.
  6. Stock Analysis

    Should You Follow Millionaires into This Sector?

    Millionaire investors—and those who follow them—should take another look at the current economic situation before making any more investment decisions.
  7. Professionals

    What to do During a Market Correction

    The market has corrected...now what? Here's what you should consider rather than panicking.
  8. Mutual Funds & ETFs

    ETF Analysis: Vanguard Mid-Cap Value

    Take an in-depth look at the Vanguard Mid-Cap Value ETF, one of the largest and most popular mid-cap funds in the U.S. equity space.
  9. Mutual Funds & ETFs

    ETF Analysis: Schwab US Broad Market

    Take an in-depth look at the Schwab U.S. Broad Market ETF, an incredibly low-cost fund based on a wide selection of the U.S. equity market.
  10. Professionals

    Tips for Helping Clients Though Market Corrections

    When the stock market sees a steep drop, clients are bound to get anxious. Here are some tips for talking them off the ledge.
RELATED TERMS
  1. Equity

    The value of an asset less the value of all liabilities on that ...
  2. Hard-To-Sell Asset

    An asset that is extremely difficult to dispose of either due ...
  3. Sucker Yield

    When an investor has essentially risked all of his capital for ...
  4. Benchmark Crude Oil

    Benchmark crude oil is crude oil that serves as a pricing reference, ...
  5. PT (Perseroan Terbatas)

    An acronym for Perseroan Terbatas, which is Limited Liability ...
  6. Ltd. (Limited)

    An abbreviation of "limited," Ltd. is a suffix that ...
RELATED FAQS
  1. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  2. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  3. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  4. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  5. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>
  6. What happens to the shares of stock purchased in a tender offer?

    The shares of stock purchased in a tender offer become the property of the purchaser. From that point forward, the purchaser, ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!