Last year, after Todd Energy had bought the McKee and nearby Mangahewa fields for an undisclosed sum from Shell New Zealand, Tweedie said his company would be conducting a major reservoir review of the fields and anticipated increasing the level of recoverable reserves for both.
Now he says he hopes the results of a gas reinjection project proposed for McKee will be positive enough to gain board approval within the next few weeks.
"It certainly looks promising; there is scope to increase ultimate recovery from the wells, which will require some additional capital expenditure. There's definitely some upside there," he told EnergyReview.Net.
Todd Energy executives were looking at "quite a significant package" of work, which he hoped would win board approval.
A McKee development project would be quite a fillip for Todd Energy, as several years ago the most recent infill drilling program failed to find additional oil reserves for former owner Fletcher Challenge Energy. Then FCE chief operating officer Lloyd Taylor, said at the time that McKee, New Zealand's first modern-day oil find, might be gone within 10 years.
Tweedie also said he was hopeful Crown Minerals would approve an extension of the 20-year McKee mining licence PML 38086, which is due to expire this coming November.
McKee currently produces about 2000 barrels of oil and 11 million cubic feet of gas per day, while Mangahewa currently produces about 450 barrels of condensate per day and 34 million cubic feet of gas per day.
Todd Energy owns 100% of the McKee mining licence and associated production facilities and 100% of the Mangahewa mining permit PMP 38150, including production facilities, though Shell Todd Oil Services operates both sites for Todd.
Tweedie would not specify what additional reserves he hoped any reinjection project could recover, though it is known the present McKee production facilities have plenty of spare capacity. McKee has two production trains, capable of processing up to 10,000 and 17,000 bopd, with gas capacity of up to 30 MMSCF/D, and export oil facilities of up to 12,000 bopd.
McKee's remaining recoverable reserves were about 3.4 million barrels of oil and 35 bcf of gas, as at June 2002, according to Crown Minerals figures; while Mangahewa contained about 600,000 barrels of condensate and 93 bcf of gas.
