Indo-Pacific Says Cheal-1 Production Test Positive

Indo-Pacific Energy reports that the Cheal-1 production test commenced on October 20 and is proceeding well. The Cheal-1 well is located in New Zealand.

Flow is being maintained through a 5/8" choke into the on-site production facilities, where the oil is separated from the gas and stored on site. Export of oil is by road tanker to the nearby TAWN production station, under a short-term marketing agreement with Swift Energy, the operator of that facility. Two shipments have already been sold. Oil flow rates are averaging around 70 barrels per day.

The production test is designed to provide estimates of the volume of gas in the reservoir accessed by Cheal-1; so that decisions on a gas export pipeline can be made. There are several options for the pipeline, including connections to the TAWN plant, to NGC's regional pipeline system or to Contact Energy's gas-fired power station, about four miles to the north.

The production test will continue for another 8-10 days at a constrained rate of one million cubic feet of gas per day. Thereafter the well will be shut-in for a week, before the downhole pressure gauges are recovered to surface and analyzed. If these show a critical reserve level, a similar test will be conducted forthwith on Cheal-2. This is an existing well deviated to the east from the same site, which also flowed gas and oil on test from the same sands when originally drilled in 1995.

A third well is planned to be drilled a short distance to the north in early 2004, to check the continuity and quality of these oil and gas sands, as well as the oil potential of the underlying Mt Messenger sands, which form a separate reservoir target. CEO Dave Bennett commented, " the production test has proceeded very well so far, with stable rates and flowing pressures being achieved. While this test was intended to establish Cheal as a producing gas field, we are delighted with the oil rates also being achieved. These are considerably higher than when the well was originally drilled, as a consequence of our improved completion and production techniques. Our custom designed and built production facilities are working well, and are scaled to handle the likely total output of all three wells."

The Parker rig has now been released from contract on the Swift operated, Tuihu-1A wellsite. The well reached the Kapuni reservoir target, but was plugged and abandoned at TD of 4845m (15,896 feet) due to engineering difficulties associated with coal seams encountered in the well. Some evidence for hydrocarbons was encountered, but not sufficient to justify the expense of deepening the well to test further within the Kapuni sandstones.

Hardman Resources has taken up West Oil's interest in ACP26.