The annual report for Melbourne-based Melbana Energy Ltd (ASX: MAY) shows that the company was going to write-down the value of its 30% interest in an onshore Taranaki permit by $A100,000.
Post the reporting period for the annual report, Melbana announced it had entered into negotiations with operator of the licence PEP51153, TAG Oil Ltd (TSX: TAO) on the basis of selling its equity for the same amount.
Earlier this year the joint venture drilled the Pukatea-1 exploration well on the permit primarily targeting the Tikorangi limestone formation.
Pukatea-1 penetrated the secondary Mt. Messenger objective, which was encountered 2m high to prognosis, recording encouraging oil shows over a 14 metre MD gross interval.
The partners later announced a production test of the Pukatea-1 oil zone found in the Mt. Messenger formation was conducted. Over a 12-hour test period using a 24/64" choke setting, the well flowed at a stabilised rate of about 276 boe/day (74% oil) without the need for artificial lift.
Melbana said based on failure of the primary target and results from the longer term production test, it determined that this permit was not core to its future activities.
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