The company said in a release that production of oil from Cheal has commenced at rates up to 300 barrels per day using temporary facilities that allow continuous oil production from one well. Production during 2005 totaled approximately 85,000 barrels.
Austral Pacific, which is operator of the newly awarded (PMP 38156) and holds a 36.5% working interest in Cheal, said first oil from the field's permanent production facilities was expected to be about 1000 barrels per day in the first quarter of 2007.
The Petroleum Mining Permit 38156 was recently awarded for the shallow Cheal oil field and the deeper Cardiff gas field.
Cheal facilities would be capable of producing up to 2000 barrels of oil a day from the shallow Urenui and Mt Messenger formations.
A reserves estimate by an independent engineering firm has estimated total proved probable and possible oil reserves of 4.4 million barrels oil in the Cheal field at 31 December 2005.
Work is to start immediately on the construction of processing facilities at the Cheal-A location. The existing wells will be worked over before being brought back into production and additional production wells will be drilled from the Cheal-A and Cheal-B well sites.
Total spending on field development is expected to be approximately NZ$25 million. Austral Pacific's share will be NZ$9.1 million, funded from cash reserves.
Austral Pacific's chief executive officer Rick Webber said the Cheal development is the first step in establishing and growing a low cost, sustainable, oil and gas production profile.
He said it was expected that one well would remain in production throughout the six month period of constructing permanent facilities.
The other participants in the Cheal joint venture are TAG Oil (NZ) Ltd and Arrowhead Energy Ltd.
Mr. Webber said the Cardiff gas/condensate field had produced at commercial rates from the upper McKee reservoir of the well. But the ultimate prize at Cardiff lay in the deeper K3E reservoir in which Austral Pacific holds a 25.1% share. "We believe we have a substantive gas resource in the K3E and that the reservoir will produce at commercial rates."
He said a rig had been contracted to undertake the work over and re-completion of the Cardiff-2A well in the 4th quarter of this year and that further appraisal testing of the K3E interval would follow immediately after.
The joint venture anticipates that by the end of the year it will be in a position to begin finalizing plans for the optimum concept for field development. The newly acquired 75 sq-km Brecon 3D seismic survey will help identify the potential for "sweet spots" in the reservoir for future production wells.
The Cardiff gas discovery was made in 1992 with the drilling of the Cardiff-1 well. A second well, Cardiff-2 (and side tracks), drilled in 2004/2005, tested gas at the McKee and deeper Kapuni intervals.
Austral Pacific is the operator of the Cardiff gas/condensate field on behalf of the joint venture participants. The participants in the Cardiff joint venture are Austral Pacific, TAG Oil, International Resource Management Corporation and Genesis Energy. Genesis Energy has first right of refusal on all Cardiff gas.
Austral Pacific also says that it has moved from its former offices in the Wellington suburb of Karori to downtown Wellington with a new address of level 3, 40 Johnston Street.
Most Popular Articles