Wellington-based McDouall Stuart says in its latest report on NZOG that Tui production has coincided with record oil prices to deliver "outstanding value" to the Tui joint venture.
"We estimate that Tui will have achieved nominal payback by March, just seven months into production," McDouall Stuart said.
The McDouall Stuart report says that with less-than-expected water cut, coupled with debottlenecking of the floating production storage and offtake vessel Umuroa, 2007/2008 financial year production should exceed 13 million barrels (MMbbl).
Sydney-headquartered AWE last month said it expected total Tui production for 2007-08 to be about 12MMbbl, up from the previously forecast 11MMbbl, due to better than anticipated field performance.
But the McDouall Stuart report says "should deliverability remain at close to 50,000bbl per day [the FPSO's maximum design processing capability] for the remaining five months of financial year 2008, and the operator remains comfortable in terms of reservoir management, FY08 production would exceed 15 MMbbls".
Water cut to date had been considerably lower than expected. Average water production during January was about 30% of the gross liquids stream, much better than pre-development modelling that had projected average water cut by this stage to be over 50%.
Three of Tui's four producing wells were currently choked-back to around 40% capacity, with the other not required at all to maintain deliverability, said McDouall Stuart.
It added that joint venture revenue - based on the latest 2P (proved and probable) recoverable reserves of 41.7MMbbl - should exceed $US4 billion ($A4.33 billion) over the economic life of the field, perhaps 10 years or so.
It said increases in project costs - from the original $US225 million ($A244 million) to $US245 million ($A265 million), then to $US269 million ($A291 million) - were more than offset by rising oil prices and two increases in recoverable reserves.
The final investment decision was based on total production of 27.9MMbbl, which was upgraded to 32MMbbl following completion of the development drilling campaign, and then 41.7MMbbl after re-assessment of seismic and integration of production data with a more detailed assessment of the producing reservoir.
The Tui partners are AWE (operator, with 42.5% interest), Mitsui (35%), Pan Pacific Petroleum (10%), and New Zealand Oil and Gas (12.5%).
