The surveys had focused on the Jerai North structure in PPL 265 and a lead near the north-eastern shores of Lake Murray straddling the border of PPL 266 and PPL 268.
Analysis of the seismic data suggested that Jerai North, located about 20 kilometres from the southern coast of Papua New Guinea and adjacent to the deepest part of the Morehead Graben where hydrocarbons would be most likely to occur, covers an area of about 21 square kilometres.
The prospect was identified by aerogravity and magnetic surveys in 2009 in an area which is believed to host oil plays.
New Guinea had shot 94 kilometres of 2D seismic across four leads to confirm closure at Jerai North and constrain maximum depth of burial of potential Jurassic source rocks,
In PPL 266, the 48 kilometre infill survey suggested that the Macadamia structure could cover 36 square kilometres and lies along trend with Talisman Energy's (TSE: TLM) Puk Puk-1 gas discovery and the recently announced Weimang-1 gas find about 50 kilometres to southeast.
Structures in this vicinity are believed to be predominantly gas plays.
There is also encouragement from internal modelling it had carried out to evaluate the potential resource size of the prospects.
The company will now apply to the Papua New Guinea Department of Petroleum and Energy to extend the licence period for PPL 265 and to seek clarification on the status of the earlier lodged extension request for PPL 266.
It will also continue to hold discussions with companies who have expressed interest in entering joint venture partnerships in these licences and may consider exploration activity to further de-risk the prospects.
Chief executive officer Grant Worner told Proactive Investors that while the company was confident of its seismic results, potential joint venture partners might have a different view or a different risk profile.
It is also putting into place plans for drilling in both licences.
This strategy of identifying drillable targets and de-risking exploration activities is aimed at replicating the success it has had in farming out PPL 268 and PPL 269 to Talisman and the sale of PPL 277 to ExxonMobil and Oil Search (ASX: OSH).
The prospectivity of the two Talisman permits was further upgraded after Mitsubishi Corporation paid US$5.18 million and US$25.7 million to Talisman for its 20% stakes in them.
PPL 265 and PPL 266 background
New Guinea Energy had previously identified one drillable target and 13 leads with unrisked in-place petroleum of 550 million barrels of oil equivalent in PPL 266 as well as 14 leads in PPL 265 with unrisked in-place petroleum of 2 billion barrels of oil equivalent.
PPL 266 is close to a potential liquefied natural gas development route and has been de-risked by the on trend Puk Puk-1 and Douglas-1 gas discoveries.
PPL 265 is crossed by a proposed road, gas pipeline and power corridor for a potential liquefied natural gas project while its location allows for any oil discovery to be quickly monetised.
The seismic work has de-risked the targeted prospects in PPL 265 and PPL 266, giving the company added confidence to market them to potential partners.
This is a strategy that New Guinea Energy has successfully employed previously and is likely to be repeated again.
An oil discovery at Jerai North can be quickly monetised thanks to its proximity to shore and while a gas find at Macadamia would be more challenging to develop, it has a lower risk profile due to the on trend discoveries at Puk Puk-1 and Weimang-1.
Puk Puk-1 is particularly interesting as independent analysis had indicated that it could be capable of producing more than 100 million cubic feet of gas per day.
A Macadamia gas find could also be monetised through Talisman's proposed gas aggregation strategy in the western part of Papua New Guinea.
Proactive Investors is a market leader in the investment news space, providing ASX "Small and Mid-cap" company news, research reports, StockTube videos and One2One Investor Forums.