qtly activities statement

JUNE 2008 QUARTERLY ACTIVITIES REPORT
Tui Area Oil Project (PMP 38158) Taranaki Basin (PPP interest 10%)
The four existing Tui field production wells continue to perform strongly. Production from the Tui oil fields totalled 3.8 million barrels (PPP 0.38 million barrels) for the June quarter, averaging close to 42,000 barrels a day despite rising water production. Production was curtailed at the end of June due to poor weather delaying tanker loading, but as of mid-July production had returned to around 42,000 barrels per day. Cumulative field production to the end of June 2008 was 14.2 million barrels. (PPP share 1.42m/b).
The anticipated detailed Tui field re-assessment was undertaken resulting in an increase in the initial proved and probable (2P) reserves from 47 million to 50.1 million barrels.
The terms of the FPSO contract have been extended through to 31 December 2022. Under the contract with Prosafe Production, the owner and operator of the Umuroa, the fixed term of the charter has been extended to 31 December 2015 followed by seven, one-year options to extend through to 31 December 2022. The full operating cost of the charter for the financial year ending 30 June 2009 is forecast to be approximately US$61million. This rate reduces annually, as negotiated in the FPSO contract, so that operating costs fall as oil rates decline over the field life.
Planning for the previously announced additional development well, Tui-4H, continues with long-lead equipment currently being purchased. Reserves attributable to Tui-4H are included in the 50.1 million barrels of 2P reserves discussed above. Studies to accommodate Tui-4H production into both the subsea and FPSO facilities are also well-advanced. Tui-4H is currently expected to be drilled in late 2009 to early 2010 depending on rig availability. Additional appraisal and/or exploration drilling in and around the Tui fields is also under consideration for the period of the same drilling campaign.
Toke permit (PEP38499) Taranaki Basin (PPP interest 10%)
Interpretation of the 2007 Toke seismic data has been completed and the joint venture operator’s recommendation as to further work is awaited.
Hector permit (PEP 38483) (PPP interest 14.091%)
The permit operator is nearing completion of its assessment of the Hector-1 exploration well results and is considering options for further seismic or exploration in the permit.
Maitland WA-33R (PPP interest 10%)
The joint venture Operator, Apache, has completed an assessment of the Maitland project after incorporation of the results from the 2007 drilling campaign. While the technical challenges of drilling and producing in the Maitland field are in the process of being resolved, the Maitland-2 core data and Maitland-3H test results have resulted in some reserves uncertainty. The Operator is now working on options to reduce this uncertainty to a level that would allow a development to proceed. These options include the possibility of further appraisal drilling and flow testing prior to a development decision being taken.
New Ventures/Senior Appointment
Following on the strong performance and cash flows from the Tui project and its firm commitment to expand the Company’s activities the Board has appointed Mr Tom Prudence to the newly-created position of General Manager, Exploration and Production to assist with this process. Mr Prudence will in addition to his role as manager of the Company’s existing operations, be tasked with the job of developing exploration and production opportunities for the Company. Mr Prudence held the position of Principal Adviser/Chief Geoscientist for RISC Pty Ltd, an international consultancy for the last four years. In this capacity he has advised on multiple diverse projects including strategy and new business developments. His new role with the Company will commence in September of this year.
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Financial Highlights as at 30 June 2008 (unaudited)
Current Assets include:
Cash held (see note below)
A$91.5m
Receivables for oil sales (gross)
A$18.3m
Tui oil inventory (WMP share)
40,412 barrels
Current Liabilities include:
Hedging – call options over 87,744 barrels @ US$92/barrel (marked to market)
A$ 4.4m
Accrued royalty taxes
A$17.0m
Income taxes (preliminary estimate)
A$22.0m
Tui project loan
nil
Note:
The Tui Project loan with CBA was repaid in full on 30 June 2008. Also on that date, US$10 million (A$10.4m) was deposited with CBA as cash collateral to support the Tui FPSO letter of credit. This deposit forms part of the abovementioned cash held of A$91.5m.
Hedged Position
During 2007 the Company hedged by way of put options approximately 719,000 barrels of oil to provide downside protection in oil prices. The Company partially offset the cost of the put options by selling call options requiring the company to deliver no more than 187,600 barrels of oil at $92.00. As at 30 June 2008, of the 187,600 barrels of oil, 72,890 barrels had expired at no cost to the Company, while a further 47,767 barrels were cash settled on maturity of the call options at a cost of USD$727,117. The remaining 87,744 mature over the period July 2008 to March 2010.
B Flatters-Wright
Company Secretary
31 July 08