"The year 2002 will be a very defining year for our operations in New Zealand. We see significant upside potential in several areas of our operation. There are good opportunities which we are excited about," company executive vice-president Bruce Vincent said from Houston.
Firstly, the Tariki, Ahuroa, Waihapa and Ngaere (Tawn) commercial fields - which Swift bought from Shell NZ earlier this year for about $US54.4 million - had brought the Texas company immediate cash flow "which are obvious benefits to us", but they also had existing infrastructure, which provided significant excess processing capacity for liquids and gas, as well as associated pipelines allowing transportation of hydrocarbons all the way to sales markets.
The Tawn acquisitions were "the "critical mass" for Swift's entire New Zealand operations.
Mr Vincent said there was considerable upside potential with the Tawn properties and a team of Swift personnel was going through the wealth of data from former operator Fletcher Challenge Energy. The team had already identified a number of projects, which, although not yet approved, could increase the booked reserves figures and/or production rates for the fields.
The central Taranaki fields would maintain relatively steady production over the next five years.
Further south the commissioning of the $US25 million Rimu production station was proceeding according to schedule.
Between 500-700 barrels of oil and 1.5-2.0 million cubic feet of gas a day were being produced from just one well, Rimu-A1. Those figures were expected to increase significantly as commissioning advanced and more wells were brought into commercial production.
Swift's total New Zealand oil and gas production for the second quarter of 2002 was expected to be between 3.2-4.0 billion cubic feet of gas equivalent.
Vincent said Swift was also planning various production enhancement techniques on various formations at different wells this year. Artificial fracturing of the upper Tariki formation at the Rimu-A2A well was planned in the next month or two. A Rimu-A4 development well was also planned in July or August.
Sand control measures, the impact of artificial lift, or fraccing of the shallow Manutahi sands encountered during the drilling of the more southerly Kauri-A1 well were to be evaluated over the next few months, as well as a Kauri-A4 exploratory well in the third or fourth quarter
Swift planned to evaluate the 2D seismic shot over the neighbouring Matai and Tawa prospects last February, with the aim of starting exploratory drilling of these new plays in early 2003.
The company saw significant growth potential for the Kauri structure, significant production opportunities from the shallow formations, such as the Miocene-aged sands or the untested Urenui sands, or even the deeper Kapuni or Cretaceous zones.
Vincent confirmed Swift Energy New Zealand (SENZ) participated in the Crown Minerals' onshore and near-shore Taranaki blocks offer, which closed on April 30, and said the company hoped to be successful with some of its bids for further acreage around the Rimu-Kauri area.
SENZ was earlier this year awarded a 30-year petroleum mining permit, PMP 38151, over 5524 acres within the petroleum exploration permit PEP 39719 to allow for the full development of the Rimu discovery.
Swift believes the Rimu, Kauri, Matai and Tawa prospects, plus additional leads within PEP 38719 have the potential to contain up to 250million barrels of oil equivalent in several different producing zones.
"We have run a lot of operations out of our Houston base, but I believe that in the next year or so our New Zealand operation will become self sustaining financially and managerially, in regards to exploration and development.
"We are staffing up there and now have about 50 people in Wellington, New Plymouth and at the Tawn and Rimu production facilities.
"We have invested a lot in Swift Energy New Zealand and are looking forward to it becoming its own business unit."
