Wellington-headquartered NZOG, in its March 2008 quarterly report released this morning, said the Australian Worldwide Exploration-operated project's oil production for the last quarter was 4.08 million barrels, taking total production since start-up last July 30 to 10.46MMbbl.
Average daily production for the March quarter was more than 44,000 barrels per day, well above pre-production modelling predictions, NZOG said.
Associated water continued to be produced at lower rates than expected from original field simulation models, thus allowing the higher oil production rate to continue for longer than anticipated.
But by the end of the quarter, the daily water volume was exceeding the oil volume and average daily oil production is now expected to decline during the June quarter.
However, given its fluid handling capacity of up to 120,000bpd, the floating production storage and offtake vessel Umuroa would still be able to process more than 40,000bpd, NZOG said.
"Tui continues to provide the sort of results that you would love to have from every oil field," the company said.
"The combination of record international oil prices, outstanding production performance and increased reserves has made Tui a very profitable investment for NZOG."
During the quarter the average price of Tui oil, net of freight and quality adjustments, increased to almost $US91 a barrel.
Tui continues to provide the bulk of NZOG's revenue. Total revenue for the quarter was $NZ58.2 million (about $A48.58 million), taking revenue for the first nine months of the financial year to $NZ153.7 million ($A128.31 million), including Tui revenue of $NZ141.8 million ($A118.37 million).
Tui operator Australian Worldwide Exploration is conducting a further reserves review, to match field performance against actual production, and is expected to announce another reserves upgrade soon.
NZOG also said the Origin Energy-operated offshore Kupe gas-condensate project further south was now about 67% complete, with all three development wells reaching their final depths and the nearby Momoho prospect due to be drilled once the jack-up Ensco Rig 107 completed and tested the development wells as producers.
Drilling of the Momoho-1 well and sidetrack - to test the west and east compartments of the Momoho prospect, which are separated by a fault - is expected to start in late May.
NZOG said the Momoho wells would target a complex structural high situated between two previous discoveries - the Kupe South-4 gas discovery, 2.5km to the north, and the Kupe South-5 oil discovery, 1.2km to the south.
A commercial gas discovery at Momoho could be developed via existing Kupe facilities, NZOG said.
NZOG invested a further $NZ31.1 million ($A25.96 million) in the $NZ1.1 billion ($A0.92 billion) Kupe development during the quarter, all of which was funded from its existing Westpac debt facility.
The Tui partners are operator AWE (42.5%), Mitsui E&P NZ (35%), NZOG (12.5%) and Pan Pacific Petroleum (10%).
The Kupe partners are operator Origin Energy (50%), Genesis Energy (31%), New Zealand Oil & Gas (15%), and Mitsui E&P NZ (4%).
