Austral Pacific Says Cardiff & Cheal Wells are Drilling Ahea

The Cardiff-2 well (Austral 25.1%, operator) is presently drilling ahead beneath 4670m (15,300 feet) and is expected to reach its TD near 4,900m (16,000 feet) in the next few days. Last week, electric logs were acquired over the uppermost 200m (700 feet) of the Kapuni Formation, above 4,200m (13,800 feet). These are of good quality, and are interpreted to show gas within reservoir sand units, particularly in the McKee and K1A Sands, which are both well developed. The K3E Sands, which are the main producers in the adjacent Kapuni giant gas-condensate field, are expected to be intersected below 4,800m (15,700 feet). However, on the basis of the log evaluation of the Upper Kapuni alone, it is intended that Cardiff-2 will be cased in preparation for testing after electric logs are run at TD.

Flow-testing of the Cheal-A4 well (Austral 36.5%, operator) utilizing a steam circulation procedure has now been completed. During this test, the well produced at maximum rates exceeding 300 barrels per day, and a total of 2,654 barrels of oil have now been produced from Cheal-4. However, this production approach does not fully address the challenges of producing this waxy, high pour-point oil; and it has been decided that jet-pumping of the well is a preferred alternative which is likely to achieve higher production rates on a sustained basis. Accordingly, the well has been temporarily shut-in to allow necessary site reconfiguration work to be completed. Jet-pump production testing is expected to commence early in the New Year. Both Cheal-A3X and Cheal-A4 wells will then be test produced using this jet pump configuration at both the deeper Mt Messenger pay level and the shallower Urenui pay level.

We remind all New Zealand warrant holders that exercise of their warrants must be completed before 5:00 p.m. New Zealand Summer Time on 5th January 2005, when the warrants will expire.