By Paul McBeth
New Zealand Oil & Gas (NZOG), Tag Oil and Beach Energy want to surrender their permit to explore the Kaheru permit off the Taranaki coast, saying the current conditions don't support drilling which has to start in May.
The joint venture today applied to surrender the permit, which operator NZOG has previously said wasn't economically viable to start drilling the prospect at the committed start date.
NZOG holds 35 percent, while Tag owns 40 percent and Beach 25 percent.
"After exploring options to defer or amend work obligations, the joint venture has submitted to the regulator an application to surrender the permit," NZOG said in a statement.
NZOG has adjusted its corporate strategy to deal with oil prices falling to the US$30 a barrel range from US$50 when it last reported, and the Wellington-based company has put greater emphasis on keeping exploration costs at their minimum contractual obligations.
The surrender comes after this week's annual energy conference where the government announced the latest block offer of oil and gas exploration permits spanning four offshore release areas in Reinga-Northland, Taranaki, Pegasus and East Coast Basins, and one onshore area in Taranaki.
Last year's slump in oil prices saw the smallest uptake and most conservative range of new petroleum licences in 2015, something Energy Minister Simon Bridges acknowledged in making the announcement.
NZOG shares rose 4.1 percent to 51 cents, and have climbed 18 percent so far this year.