Speaking after yesterday's annual meeting in Wellington, Tweedie said everybody was very excited about the hydrocarbon signs at the Bilip-1 well, which was testing a structure near the producing SE Gobe oil field in Papua New Guinea. The well was very close to the 2540m target and wireline logs should be run to determine if flow testing was warranted.
Pre-drilling estimates put the potential of Bilip at 30 million to 100 million barrels of oil, though Cue has declined to comment further on the reservoir potential. Cue has an 11% interest in Bilip, with Santos and Oil Search holding about 31% each, and Murray Partners 26.5%.
Tweedie also said Cue, Aussie firm Santos and United States company El Paso and Cue were in the final stages of a possible joint oil and gas development of the Oyong discovery in the Sampang licence, offshore East Java, Indonesia.
Cue expected a memorandum of understanding to be signed with a gas buyer within the next two weeks. Early estimates were about 90 bcf of recoverable gas and possibly 80-90 million barrels of oil. Cue has a 15% interest in Oyong.
Tweedie said the producer price of gas in Indonesia was about $US2 a Gigajoule, compared with the Maui gas price of about $NZ1.70 per GJ.
The development concept was almost finalised and would consist of two oil and three gas wells, a small offshore unmanned platform and a 60km pipeline to a diesel-fired power station that was keen to use gas. Oil would be shipped out by barge.
First commercial production was expected in 2004 and Cue's share of capital expenditure was expected to be about $US11.3 million.
Cue anticipated an additional wildcat well would be drilled on the Oyong trend in 2003, with the target structure, Mangga, having the potential to hold similar volumes of gas to Oyong.
Meanwhile, Tweedie, who is also Todd Energy managing director, told EnergyReview.Net that, contrary to media reports, Todd was not bidding for NGC Holding's Stratford gas-fired power station. "Definitely not, we are not bidding, we are not interested."
The New Zealand Herald newspaper earlier this week said it understood the shortlist of bidders for the station was Contact Energy, Genesis Power, Todd Energy and two overseas power companies, possibly Australian.
