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NZ's Pateke-4H Well Drilling Cost to Rise Due to Operational Difficulties

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AWE Limited revealed Tuesday that as at 06:00 hours (6.00am NZDT) today preparations are being made to drill a second sidetrack on the Pateke-4H development well in petroleum mining permit (PEP) 38158 offshore New Zealand. Operations have been unable to drill past an obstruction in the lower portion of the first sidetrack (ST-1) and a second sidetrack (ST-2) will be drilled from a measured depth of 11,768 feet (3,587 meters) with an 8.5 inch drilling assembly.

The forward work plan requires ST-2 to be drilled to a depth of approximately 13,484 feet (4,110 meters) and intersect the F10 reservoir at a horizontal angle of approximately 90 degrees. Drilling will continue through the F10 reservoir section to a planned total measured depth of 17,588 feet (5,361meters), following which a 6.625 inch production liner will be installed.

The Kapuni F10 sandstone objective has already been intersected on prognosis with oil shows and real time logging measurements indicating the likely presence of an oil bearing reservoir. The commercial significance of the oil shows will not be clear until the horizontal drilling is completed and the reservoir size and quality is fully assessed.

Based on the additional work required to mitigate the operational difficulties encountered to date, gross pre-completion well costs have increased beyond the pre-spud estimate of $55 million (AWE share $32 million). An updated estimate of pre-completion well costs will be issued after the horizontal drilling is completed and the production liner has been installed.

The Pateke-4H development well is in PMP 38158 and AWE is the Operator. Located in the offshore Taranaki Basin, New Zealand, PMP 38158 contains the Tui, Amokura and Pateke fields and has been producing since 2007.

Pateke-4H is targeting a mapped northern extension of the currently producing Pateke field. The well is being drilled in water depth of approximately 406 feet (124 meters) with a planned total measured depth of 17,588 feet (5,361 meters), including a 4,173 feet (1,272 meters) horizontal section. If successful, the well will be completed for subsequent tie-back to the Tui FPSO (Umuroa) for production in 2015.

The Joint Venture partners in PMP 38158 are:

  • AWE Limited (via subsidiaries) (Operator): 57.5 percent
  • New Zealand Oil & Gas (via subsidiaries): 27.5 percent
  • Pan Pacific Petroleum (via subsidiaries): 15.0 percent

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