LM Energy plans to drill a new well in a dormant gas field in Taranaki.
The company says commercial gas and condensate was being taken from the Kahili field before it unexpectedly stopped in 2004.
More seismic mapping has been conducted since, and the joint venture will now target a larger area of gas condensate believed to be nearby.
LM says it thinks it will have a high chance of success and aims to generate significant cashflows within 12 months.
LM has a quarter of the permit, with the Mosaic Oil NZ of Australia holding the remainder.