Explorer New Zealand Oil and Gas and Origin Energy, Contact Energy's parent, may be sitting on a gas prospect three-quarters the size of Maui, potentially worth billions of dollars.
The offshore Mangatoa prospect in north Taranaki could be bigger than first thought and might hold as much as three trillion cubic feet of gas, NZOG said yesterday in a quarterly activities report.
That is about 3000 petajoules of gas, three-quarters the size of Maui and more than three times the Pohokura gasfield, still to be developed.
NZOG owns 50 per cent of the prospect and is the operator, and Origin owns the other 50 per cent.
Previously, NZOG had been talking about Mangatoa possibly holding two trillion cubic feet of gas.
If a big gasfield was discovered, it could kill proposals to import liquefied natural gas by two big electricity producers, Contact Energy and state power company Genesis Power.
It might also help cure the woes of methanol-maker Methanex, operating at about a sixth of its capacity because of the rundown of Maui and insufficient supplies of local gas.
NZOG and Origin are looking in New Zealand and internationally for a partner to buy into the Mangatoa prospect.
The partner would pay for the drilling of an exploration well - estimated to cost $20 million - to establish the size of potential reserves.
The NZOG report said: "Further evaluation points to this cretaceous gas prospect (3.8 kilometres below sea level) having even greater size than previously assessed with reserves possibly as great as three trillion cubic feet."
NZOG had been reassessing the 2D seismic mappings of the Mangatoa prospect, general manager Gordon Ward said yesterday.
"The prospect, as (the new geophysics manager) sees it, could be up to three trillion cubic feet.
"The company has been re-evaluating the data and has perhaps a little more optimistic view of the upside.
"It is potentially quite large. It's offshore so carries higher capital costs - if we are successful with an exploratory well - to develop than an onshore well and it will take longer.
"(They) would be nice problems to have if we are able to get the funding together for the well, and see that drilled and have a commercial success.
"We are a long way off that yet."
Origin had done its own mapping of the Mangatoa prospect.
"I think in general terms they (Origin) see a larger upside in the prospect than we have previously."
Mangatoa was high risk. The greatest uncertainty was whether gas flow rates would be good enough for commercial production.
NZOG and Origin put out an information memorandum on Mangatoa late last year to attract a partner.
It said most likely gas reserves at Mangatoa were two trillion cubic feet and the prospect could generate gross revenue of US$12.5 billion (NZ$17.6 billion).
Mr Ward said some overseas and New Zealand-based parties had shown "preliminary interest" in Mangatoa.
"We think that there will be interest from New Zealand companies, particularly from gas users," Mr Ward said.
NZOG would complete its re-evaluation of the prospect, update the information memorandum and talk to the parties again that had shown interest.
Mangatoa is offshore in north Taranaki.
The Te Ranga well was drilled in the prospect in 1986 and intersected a 140-metre gas column. NZOG wants to drill an exploration well 8km from the Te Ranga well.