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. Investing News

    Latest Labor Numbers: Good News for the Market?

    Some economic numbers are indicating that the labor market is outperforming the stock market. Should investors be bullish?
  2. Investing News

    Stocks with Big Dividend Yields: 'It's a Trap!'

    Should you seek high yielding-dividend stocks in the current investment environment?
  3. Investing News

    Should You Be Betting with Buffett Right Now?

    Following Warren Buffett's stock picks has historically been a good strategy. Is considering his biggest holdings in 2016 a good idea?
  4. Products and Investments

    Cash vs. Stocks: How to Decide Which is Best

    Is it better to keep your money in cash or is a down market a good time to buy stocks at a lower cost?
  5. Investing News

    Who Does Cheap Oil Benefit? See This Stock (DG)

    Cheap oil won't benefit most companies, but this retailer might buck that trend.
  6. Investing

    How to Ballast a Portfolio with Bonds

    If January and early February performance is any guide, there’s a new normal in financial markets today: Heightened volatility.
  7. Stock Analysis

    Performance Review: Emerging Markets Equities in 2015

    Find out why emerging markets struggled in 2015 and why a half-decade long trend of poor returns is proving optimistic growth investors wrong.
  8. Investing News

    Today's Sell-off: Are We in a Margin Liquidation?

    If we're in market liquidation, is it good news or bad news? That party depends on your timeframe.
  9. Economics

    4 Countries Pleading for Higher Commodity Prices

    Discover what countries are struggling the most from the price collapse in commodities and what these countries require to return to economic growth.
  10. Investing News

    Bank Stocks: Time to Buy or Avoid? (WFC, JPM, C)

    Bank stocks have been pounded. Is this the right time to buy or should they be avoided?
RELATED FAQS
  1. Which mutual funds made money in 2008?

    Out of the 2,800 mutual funds that Morningstar, Inc., the leading provider of independent investment research in North America, ... Read Full Answer >>
  2. Do hedge funds invest in commodities?

    There are several hedge funds that invest in commodities. Many hedge funds have broad macroeconomic strategies and invest ... Read Full Answer >>
  3. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  4. 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 >>
  5. 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 >>
  6. 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 >>
COMPANIES IN THIS ARTICLE
Trading Center