Success at Swift’s US operations – a production increase of almost 32% from 43 billion cubic feet equivalent to 56.7Bcfe – contrasted with an 18% drop in New Zealand output, from 16.5Bcfe to 13.5Bcfe.
Swift today announced record net income for 2006 of $US161.6 million ($A206.8 million), a 40% increase on the 2005 result of $115.8 million. The company also said it had achieved record production for the year of 70.2Bcfe, an 18% increase on the 59.6Bcfe achieved in 2005.
It said its decreasing New Zealand production was the result of natural declines in both oil and gas and a lack of reserve additions from its onshore Taranaki drilling program. New Zealand proved reserves at the end of 2006 had declined by 10%, from 118Bcfe to 106Bcfe.
Swift said its 2006 New Zealand exploration drilling was focused on five wells – Goss-A1, Trapper-A1, Kowhai-A1, and Waihapa-H1 and the Waihapa-4 sidetrack – all of which were unsuccessful. That meant there were no additional proven, undeveloped (PUD) reserves assigned.
But Swift was successful with three of the four development wells drilled in the more southern Rimu-Kauri oil fields.
The failure of Goss-A1 and Trapper-A1 follows the Tawa-A1 duster of 2005 and signals the end of the current three-well commitment by state-owned downstream player Mighty River Power to fund some of Swift’s onshore Taranaki exploration wells.
MRP joined forces with Swift in March 2005 to explore for “deep gas” (Eocene-aged or earlier) in the onshore Tariki-Ahuroa-Waihapa-Ngaere fields and the Rimu-Kauri region.
That JV arrangement also includes the southern offshore Taranaki licence PEP 38495, where Swift and MRP are planning to use a jack-up rig in early 2008 to test the promising Kaheru prospect.
Swift also said today that its New Zealand gas price was continuing to slip, from an average of $US3.09 per thousand standard cubic feet during 2005 to $2.99 per thousand standard cubic feet last year. But the last 2006 quarter’s average gas price had jumped to $3.24 per thousand standard cubic feet.
New Zealand gas price contracts are remitted in New Zealand dollars, which had strengthened during the 2006 fourth quarter against the greenback, compared with the same period in 2005.
Chief executive Terry Swift said the company planned to spend $US350-400 million in total capital expenditure this year, with about 90% of that targeted for US activities and about 10% in New Zealand. He anticipated production growth of 7-10%, and reserves growth of 4-6% this year.
