The small Wellington-based firm has been very busy so far this year - with its successful NZ$8 million Initial Public Offering on the New Zealand Stock Exchange, being awarded several new Taranaki exploration permits, and starting an intensive drilling campaign.
While Todd Energy may lay claim to being this country’s most active explorer since the 1950s, it is now Austral Pacific and its partners which are among the leading explorers, particularly in onshore Taranaki.
Austral Pacific recently announced an updated schedule for its 2004 onshore Taranaki drilling program, covering several Austral operated and non-operated licences, following the winning of three new exploration permits in the region.
The first of perhaps five wells, Cheal-A3X well in PEP 38738, is due to spud on April 8 and will be deviated 500m north from the existing Cheal discovery site to intersect the Miocene-aged Mt Messenger sandstones, some 200m below the even shallower Urenui formation in which the Cheal pay sands are situated. The Mt Messenger sands had some oil pay, indicated by electric logs in Cheal-1. Good reservoir, but without oil charge, was intersected in Cheal-2, during the mid-1990s.
Production testing of Cheal-1 last year produced at up to 4.5 million cubic feet of gas and about 70 barrels of oil per day, more than twice the flow rates recorded when the well was originally tested.
Austral Pacific chief executive Dave Bennett says Cheal is a typically small shallow onshore Taranaki field, with likely recoverable reserves of 1-2 million barrels of oil and or condensate.
“The likelihood of being able to develop such fields economically has increased markedly in recent months, with the ever strengthening gas market and improved well completion techniques and associated technologies.
“The nomenclature of the well is because it is being drilled from the Cheal-A well site, it’s the third Cheal well and X signifies that it is an exploration well to the Mount Messenger level, in addition to intersecting the Urenui pay sequence.
“If successful, then a cluster of deviated wells could be drilled, over time, from the A wellsite, then from a B wellsite and so on.”
Austral holds a 33.5% stake in PEP 38738 and is operator of the permit.
Bennett says the second well in the present program will be Honeysuckle-1, in PEP 38741, where Austral holds a 30% interest and again acts as operator.
Honeysuckle-1 is likely to spud towards the end of April and will to be drilled to approximately 1700m to test several Mt Messenger targets mapped from last year’s 3D Kaimata seismic survey which Austral operated. Honeysuckle is one of several targets identified within PEP 38741. Other significant targets are Jasmine, Wisteria, Supplejack and Ratanui.
The Honeysuckle trap is situated near the southwest end of the deeper McKee oil field and in the event of discovery might establish reserves of similar size to the nearby Ngatoro field, which Crown Minerals estimates originally held 6.4 million barrels of oil-condensate and 8.7 bcf of gas.
The third, Miromiro-1, and fourth wells are located in non-Austral operated permits PEP 38765 (Austral 27.5% interest) and PEP 38748 (Austral 25% interest), situated adjacent to but south of PEP 38741.
These permits were also covered by the Kaimata 3D survey; and a number of similar targets have been identified in these areas. The joint venture parties are presently finalising their choice for well locations in each of these permits, which are to be drilled by operator Tap Oil New Zealand after Honeysuckle.
It is likely the South Pacific Drilling Ltd truck-mounted Rig No 2 will be used to drill at least some of these shallow wells. SPDL is headquartered in Stratford, Taranaki.
Further south in central Taranaki, the Oru structure in PEP 38716, where Austral now holds a 43% interest and operates the permit, is being assessed as a possible fifth well for this drilling program. Oru is believed to hold a drillable Mt Messenger target situated above the eastern flank of the nearby Waihapa oil field.
“This drilling program provides several excellent opportunities for new oil and or gas discoveries, in an area surrounded by producing fields. It will also determine the appropriate manner in which to develop the Cheal field itself. Obviously, any discoveries will themselves stimulate further drilling within our permit areas”, Bennett adds.
In addition to the already mentioned shallow wells, Austral and its partners plan some deep gas drilling, targeting various Eocene-aged structures.
The first planned deep gas target is the Cardiff-2 well, in PEP 38738 (which Austral operates and holds a 33.5% interest) which will re-evaluate the gas discovery made by Shell NZ some 14 years ago at the nearby Cardiff-1 well.
Austral believes that through the application of modern drilling technology it should be possible to hydraulically fracture gas pay intervals, and so prove-up Cardiff-2 to be a very substantial gas-condensate reserve.
The Cardiff structure is mapped as a large anticlinal trap within the Kapuni sands below the 4000m depth, some 12 km long by 3 km wide, situated immediately adjacent to the giant Kapuni gas-condensate field.
The Cardiff wellsite is being permitted, and inventory purchase is now underway in preparation for a mid-year start to Cardiff-2. The parties are still in discussions with parties to assist with the cost of drilling the well.
In addition to Cardiff, Austral also has the comparable Waitoriki Prospect in PEP 38741 mapped on 3D seismic and ready to drill; while several other significant deep gas targets have been identified.
As well, Austral Pacific has consolidated and extended its onshore Taranaki portfolio by winning three new permits in the latest onshore/offshore Taranaki bidding round.
The new permits are: PEP 38765, where Austral will be involved in a well later this year; PEP 38766, south of Inglewood and essentially an extension of Austral’s existing block PEP 38748; and PEP 38768, northeast and adjacent to the McKee oil field.
Continued Part 2.
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