Company chief executive Dave Bennett told EneryReview.Net from Wellington today that he was very pleased with the Cheal extended production test that started on October 19.

"The well is flowing oil substantially better than expected and significantly better than recorded previously, when the well was first tested in 1995."

Cheal-1, in licence PEP38738, is presently flowing at a rate of approximately 1.5 million cubic foot per day of gas and a presently unmetered rate of oil, constrained by a 28/64" choke.

Bennett would not be drawn on possible oil flow rates, but said he believed the absolute open-hole potential of the well could be 4.5-5.0 mmscf/d of gas, similar to that recorded during the first flaring done last July.

Given that Cheal-1 originally flowed about 40 barrels a day during the 1995 testing, the present re-entered and recompleted well could flow in excess of 100 bopd. Several tanker loads of crude have already been trucked by road to Swift Energy's nearby Waihapa production station.

Bennett added that the whole purpose of the extended Cheal test was to confirm the presence of reserves sufficient to justify construction of a gas export pipeline. There were several choices available for marketing Cheal gas, though Bennett declined to specify what they might be.

However, linking in to NGC's nearby high-pressure pipeline network or to the Waihapa production station, only 6 km away, are obvious options. Testing of Cheal-2 and the drilling of a Cheal-3 well, higher on the structure, are still being considered.

Present production is from Miocene-aged formations found at depths of about 1220m and is scheduled to continue for a further 10 days.