Austral last night said testing of the Cardiff-2A well, in licence PEP 38738, was continuing, with steady production of gas to flare and condensate to tank.

The natural gas had a high (25%) carbon dioxide content, as expected, and flow rates were about one million cubic feet per day and 30 barrels of condensate. The flow of hydrocarbons was interpreted to be dominantly from the topmost test zone, near 4050m.

Clean-out of sands from tubing and casing in the lower part of the well had been successful, but on further testing, a viscous, oily residue, mixed with some further frac sand, again blocked the lower part of the well - the bottom test zone below 4800m.

There was evidence gas from the bottom test zone was gradually breaking through this obstruction.

But Austral had decided to re-enter the well again with a coil tubing unit to clear out the obstruction and inject nitrogen to assist the bottom zone to kick-in to flow, chief executive Dave Bennett told EnergyReview.net today.

"We think this well should be performing a lot better.”

Bennett said that last week the bottom zone had been flowing at a modest rate when suddenly there was a big belch.

“We are not exactly sure what this black gunge is, but it could be asphaltenes clogging the hole, as has happened at nearby Kapuni and, more recently, the Radnor-1 well," he said.

“We are putting soap sticks down, melting the wax, cleaning up the hole. But it will be next week at the earliest before we can test the bottom zone, which is the biggest zone and should be the most productive.”

The original Cardiff-2 well encountered good shows in the Eocene-aged McKee, K1A, K2 and deeper K3E sands.

But Austral and its “deep” PEP 38738 partners must be very frustrated now they have spent more than a year, and probably NZ$30 million or more, sidetracking, drilling, redrilling, waiting for test equipment, and still are not able to comprehensively test Cardiff.

Canadian independent consultant Sproule International estimates Cardiff contains “probabilistic” reserves in place of 215 bcf of gas and 12.8 million of condensate.

Failure at Cardiff could jeopardise Genesis Energy’s plans to build a 240-360MW gas-fired power station near Helensville, north of Auckland, by the 2008-09 summer as that plant depends on Genesis developing its gas reserves.

Elsewhere in PEP 38738, at the Cheal oil field (Austral 36.5%, operator), commissioning of the onsite electrical generation system is continuing, using the gas associated with oil production from Cheal-A4.

Due to temporary limitations on the ability of the Waihapa Production Station to accept all oil produced, full commissioning and acceptance is now scheduled for the end of October.

Meanwhile, Austral Pacific has announced details of an onshore Taranaki, New Zealand drilling campaign for the rest of this year and next – involving at least four wells, starting with the spudding of Oru-1 next week.

Wellington-headquartered Austral said the OD & E Rig 19 was due to spud Oru-1 – located in PEP 38716 where Austral holds a 52.9% stake and is operator – around October 28.

Oru would be another shallow (target depth of approximately 1600m) well to test the oil bearing potential of Miocene-aged Mount Messenger sandstones within a seismically defined structure situated above the eastern flank of the deeper commercial Waihapa oil field. The nearby Wingrove-1 well had produced oil from the shallow sands.

Pukengahu-1, also in PEP 38716, was being considered for drilling later this year; while Heaphy-1 in PEP 38746 (Austral operator, 66.7%) was scheduled for the first half of next year. Ratanui-1, in PEP 38741 (Austral operator, 30%) was scheduled for the third quarter of 2006.