AWE, as Operator of the Tui Joint Venture, has advised that preliminary work completed on the Tui Area Oil Fields indicates that the gross initial developed 2P reserves recoverable from the existing four well development of the fields will be reduced from the previously reported 50.5 million barrels to between 40 and 42 million barrels. This would leave gross remaining developed 2P reserves as at June 30, 2011 of between 9 and 11 million barrels and would represent a reduction of between 1.1 to 1.3 million barrels net to NZOG. An independent review of the reserves estimate is being undertaken by RPS Energy Pty Ltd (RPS). The RPS review is anticipated by AWE to be completed in early August 2011. A finalized 2P reserves estimate will be advised after the Joint Venture and RPS review has been completed.
AWE's evaluation has also identified possible additional volumes of oil not accessed by the current production wells in the Tui fields. To recover this oil additional wells or side tracks of existing wells will be required. Further work is being progressed that may mature these opportunities into a firm project that would add back a portion of the reserves reduction.
The revised 2P reserves estimate indicates an economic cut‐off for production in the 2019 to 2020 period based on operating costs for the FPSO Umuroa, the oil price forecast at that time, and no future infill drilling or exploration drilling success.
Concurrently, reprocessing and reinterpretation of the Tui 3D seismic undertaken by AWE has identified exploration prospects adjacent to the Tui fields which are under ongoing evaluation.
Participating interests in the Tui Joint Venture are:
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