NEW ZEALAND Oil & Gas (NZOG) and its partners in the Kaheru permit offshore South Taranaki have applied to New Zealand Petroleum & Minerals to relinquish their claim over the permit.

In an announcement, NZOG said current economic conditions meant it could not justify drilling the permit prior to the commitment date of May 2016.

The partners decided to withdraw after exploring options to defer or amend work obligations.

The Kaheru permit, PEP 52181, is operated by NZOG with a 35 per cent stake, while Canada-based TAG Oil holds 40% and Beach Energy holds 25%.

In a separate announcement, TAG Oil chief executive Toby Pierce said the relinquishment was the last of several divestments pursued by the company to reduce its future liabilities.

“From this point forward, we’re now in growth mode and plan to participate in the recently announced 2016 New Zealand block offer,” he said.

“Further, we continue to work on joint ventures and acquisitions to grow our portfolio of opportunities.”

TAG Oil surrendered Sidewinder B – on PEP 38748 – on 5 February this year, after surrendering PEP 38348 (Waitangi Valley) and PEP 52589 (Canterbury) late in 2015.