Denver-based ECA, which operates as Westech Energy in New Zealand, plans to spud Waitahora-1 in mid-March, with ECA business development vice-president Denny McGowan saying a different operational focus and better understanding of the changing New Zealand gas market should improve Westech’s chances of commercial success.
“We drilled a number of wells on the onshore East Coast over the years from 1998 with many gas shows but were never able to commercially develop any of them,” McGowan told PetroleumNews.net in New Plymouth.
“Since then, we believe we have learned a lot about the region’s geology and are better prepared to tackle any complex operational aspects.
“We remain optimistic of there being a lot of gas on the East Coast and believe there are several significant accumulations, totalling several Bcf [billion cubic feet] or larger.”
ECA previously believed only a large East Coast discovery could be commercial as the region lacked infrastructure and gas prices were then very low (about $NZ2.00-2.50 per gigajoule).
But New Zealand gas now wholesales between $NZ4.50 and $5.50/GJ, and the growth of the area’s industry, from forestry to meat packing houses, now means modest finds will be viable. McGowan said there was also potential for working with local power suppliers on small gas-fired electricity generation.
Kauhauroa, near Wairoa, was Westech’s first strike and subsequent finds included Awatere and Tuhara. However, the lack of infrastructure and low gas prices prevented any economic developments.
McGowan said Westech hoped to spud the Waitahora well by mid-March, in 100% Westech-owned licence PEP 38346. A second well might be possible in the same permit during 2008-09, after shooting more 3D seismic, processing and interpreting the data.
Westech was also a partner, along with Claire Energy, in the unsuccessful 2004 Tawatawa-1 well in licence PEP 38333 operated by Perth-based Tap Oil.
McGowan said while no further offshore East Coast wells were on the horizon, an offshore Taranaki well was.
Westech had recently taken over as operator of licence PEP 38491 from Houston-headquartered Transworld Exploration and Production. Recent farminee, government-owned Mighty River Power, and Westech had bought out Transworld and New Zealand private company Bridge Petroleum. Westech now held 33.33% equity and MRP 66.67%.
Recent work over the 1429 square kilometre permit off the north Taranaki coast had included 240sq.km of 3D seismic data shot last summer.
The partners now had a drilling commitment to fulfil by June, but McGowan said he was confident Crown Minerals would allow them the opportunity to grab a later slot in the Ocean Patriot’s current drilling program.
The semi-submersible rig will be drilling 10 wells off Taranaki – four Tui Area development and two near-field appraisal wells, plus four wildcats – until early 2008.
In onshore Taranaki, Westech was still considering production options for its small Windsor gas-condensate find in licence PMP 38152, with its small estimated gas reserves of only 500 million cubic feet, while the nearby Surrey oil field continued pumping up to 70 barrels of oil per day.
“New Zealand is one of our company’s key core operating areas, along with the Eastern US and the onshore Texas-Gulf of Mexico region,” McGowan said.
“We have made a significant investment in New Zealand over the years, spending several tens of millions of US dollars. We are now hoping for a return on that investment and are looking forward to what the next few years will bring.”
