The Wellington-headquartered company today released further details on its planned exploration and development program for 2004, including the latest on testing at the Cheal oil and gas field in license PEP 38738.
Indo-Pacific said the month-long production test of Cheal-1 finished in late November and the downhole gauges were retrieved. However, analysis of the gauge data had proved complicated because separate oil and gas reservoirs were flowing simultaneously within the Miocene-aged pay interval, about 1400m down.
"That has lead to some head scratching, it's not a clear result, and while such flowing from separate zones is not unique, it is not that common in Taranaki," company chief executive Dave Bennett told EnergyReview.Net.
The gas produced over the 20m interval was almost pure methane, with few higher hydrocarbons, which was not consistent with gas that had come out of solution. As well, gas production had been very stable, at 500,000 cubic foot per day, while oil production had averaged 50 bopd but had been as high as 70 bopd, he told ERN.
"I believe Cheal will still be developed in one form or another," he said, but added that the preferred development option and timetable remained unclear.
Further downhole pressure data was required to properly define the well flow parameters and hence draw conclusions on the gas volumes at Cheal-1. The pressure gauges would, therefore, be placed back into the well, where they would remain until the New Year.
A total of 1330 barrels of oil and 20 million cubic feet of gas had been produced during Cheal-1 testing and the testing of the nearby Cheal-2 well and the drilling of a third appraisal well were scheduled for early next year, with field production targeted for perhaps mid-2004.
Meanwhile, Indo-Pacific said a Cardiff-2 appraisal well, in the Cardiff prospect that was also in PEP 38738, was planned for 2004, subject to an appropriate level of third party funding. Cardiff-1, which was drilled by a Shell-led consortium in 1991, flowed gas on test from the Eocene-aged Kapuni sandstones below 4000m.
Bennett believed modern drilling, testing and completion technologies should enable production of gas from the Cardiff structure to be at commercial rates.
As well as Cardiff, Indo-Pacific held interests in several other permits containing deep gas targets. Waitoriki, Onaero North and Akama in onshore Taranaki, as well as the offshore Orca prospect should be drilled in the next two years, subject to satisfactory funding through farm-outs or Indo-Pacific's NZ$8 million Initial Public Offering which closes on December 12.
The Kaimata 3D seismic survey shot in onshore Taranaki during early 2003 had enabled the identification of a number of shallow, Miocene-aged targets similar to Indo-Pacific's 2001 Goldie oil discovery and the Ngatoro oil pools. Indo-Pacific planned to drill three of these targets during 2004, together with a similar target identified outside the 3D area.
Oil pools of this type were typically in the 0.5-2 million barrel range, with discovery wells typically producing 200-700 barrels of oil per day. Existing infrastructure, the high value of the typically light sweet crude, and the low royalty payable on such production, enabled high operating profits per barrel.
Bennett also said Indo-Pacific held longer term 'high risk-high reward' permits in Papua New Guinea, offshore northwest Australia and in the Canterbury Basin. These all contained large prospects which were ready to drill, but Indo-Pacific needed third parties to take significant percentages of equity to fund that drilling.
Prospects in this category included Douglas, Kamu and Maipe in Papua New Guinea; Dorado, Ursa and Rossini in offshore northwest Australia; and Corvette, Schooner and Frigate off Canterbury.
