AWE Reports an 80% Increase in Pateke-4H Drilling Costs to $99M
AWE Limited reported Tuesday that as at 06:00 hours (6:00 a.m. NZDT) the Pateke-4H development well in petroleum mining permit (PMP) 38158 offshore New Zealand was at a total measured depth of 15,656 feet (4,772 meters), including a 2,457 foot (749 meter) horizontal section through the reservoir. The total depth was revised from the original 17,654 feet (5,381 meters) target due to the high quality of the reservoir encountered and to ensure a stable well bore was achieved for effective completion and production.
Installation of a 6.625 inch slotted production liner has been completed. Preparations are being made to run the completion and suspend the well to enable production in 1Q 2015 following the installation of sub-sea flowline infrastructure and tie-back to the Tui FPSO.
The oil-bearing properties of the Kapuni F10 reservoir are positive. Further analysis is required to determine the expected recovery from Pateke-4H, but initial evaluation suggests a resource range consistent with the pre-drill estimate of approximately 2.5 million barrels gross.
Based on the significant additional work required to mitigate the mechanical difficulties and drill the two sidetracks, gross pre-completion well costs have increased beyond the pre-drilling estimate of $55 million (AWE share $32 million). The revised estimated gross pre-completion well cost is $99 million (AWE share $57 million) with completion costs estimated at $12 million gross.
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 in water depth of approximately 406 feet (124 meters) and has been drilled into a northern extension of the producing Pateke field.
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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