New Zealand Energy Corp. announced that the Company has made its fifth oil discovery in the Taranaki Basin of New Zealand's North Island.
The Waitapu-2 well was drilled to a total measured depth of 6,841 feet (2,085 meters), encountering approximately 20.3 feet (6.2 meters) of net pay in the Mt. Messenger Formation, a thick sequence of turbidite sandstones in New Zealand's Taranaki Basin. The Waitapu-2 well is currently flowing at a rate of 325 barrels of oil per day and 800 thousand cubic feet of natural gas per day through a 24/64th inch choke. The well is producing sweet, high-quality 40 degree API oil that is being trucked to the Shell-operated Omata Tank Farm, approximately 45 km north of the site, and sold at Brent pricing. To date the Waitapu-2 well has produced 1,880 barrels of oil. The well will be flowed for approximately two weeks and then shut-in for pressure build-up. Subject to assessment of ongoing production, a decision will be made to lay .8 miles (1.3 kilometers) of new pipeline to tie-in to the Waihapa Production Station through the existing Copper Moki pipeline.
"The fact that the Waitapu-2 well is flowing from natural reservoir pressure, as the Copper Moki wells did, further confirms NZEC's geological model," said Bruce McIntyre, Executive Director of NZEC. "Most Mt. Messenger wells in the region have required artificial lift almost immediately. We are continuing to refine our geological model based on drilling success to date and interpretation of the recently completed 3D seismic survey, and have many more prospects to drill that we feel are comparable to the Copper Moki and Waitapu discoveries."
The Company's first well drilled at the Waitapu site, the Waitapu-1 well, was drilled to a measured depth of 7,260 feet (2,213 meters), then cased and completed across a gross interval of 98 feet (30 meters) in the Mt. Messenger Formation. While a significant sand interval was identified with oil and natural gas shows, the permeability and porosity was such that the well did not yield economic production. The well has been suspended pending further evaluation and/or sidetrack to an alternate target.
NZEC has reached target depth on the third well in its current eight-well program. The Arakamu-2 well, NZEC's first well at the Arakamu site, has reached target depth at a measured depth of 7,808 feet (2,380 meters). NZEC has commenced casing the well, with completion to follow. The well encountered 26.6 feet (8.1 meters) of net pay in two potentially productive zones in the Mt. Messenger Formation. The lower zone will be completed first with the second zone to follow. The Company will announce results from the Arakamu-2 well once testing has yielded enough information for the Company to estimate the well's productive potential, with testing expected to commence in late November. Following completion of the Arakamu-2 well, NZEC will move the rig to spud Arakamu-1A, which is targeting the deeper Moki formation.
NZEC will drill four more wells after Arakamu-1A with the objective of completing its eight-well program and increasing production to 3,000 barrels of oil equivalent per day by the end of 1Q-2013.
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