NZO new zealand oil & gas ltd ordinary shares

Ann: MINE: NZO: Pateke-4H drilling update

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    					NZO
    06/05/2014 12:03
    MINE
    
    REL: 1203 HRS New Zealand Oil and Gas Limited
    
    MINE: NZO: Pateke-4H drilling update
    
    At 06:00 this morning (NZST) the Pateke-4H well offshore Taranaki, New
    Zealand, was at a total measured depth of 4,772 metres, including a 749 metre
    horizontal section through the reservoir.
    
    The total depth was revised from the original 5,381 metre target due to the
    high quality of the reservoir encountered and to ensure a stable well bore
    was achieved for effective completion and production.
    
    Installation of a 6 5/8 inch slotted production liner has been completed and
    operations are currently setting the liner hanger.
    
    Preparations are being made to run the completion and suspend the well to
    enable production in the first quarter of 2015 following the installation of
    sub-sea flowline infrastructure and tie-back to the Tui FPSO, Umuroa.  These
    activities are expected to take about 10 days. The well will then be
    suspended and the rig will move to the Oi-1 location. On current planning
    Oi-1 is expected to spud during the last week of May.
    
    The oil-bearing properties of the Kapuni F10 reservoir are positive.  Further
    analysis is required to determine the expected recovery from Pateke-4H, but
    initial evaluation is consistent with the pre-drill 2C resource estimate of
    2.5 million barrels (687,500 barrels net to New Zealand Oil & Gas).
    
    Based on the significant additional work required to mitigate the mechanical
    difficulties and drill the two sidetracks, costs have increased beyond the
    pre-drilling estimate, and the total project cost to New Zealand Oil & Gas
    (including the costs of tie back) is currently expected to be in the range of
    US$40-46 million.  This estimate will be updated when more certainty exists
    around subsea installation costs.
    
    New Zealand Oil & Gas has a 27.5 per cent interest in Tui.
    The other Tui joint venture partners are:
    AWE Limited (via subsidiaries) (Operator) 57.5%
    Pan Pacific Petroleum (via subsidiaries) 15.0%
    
    Resources have been evaluated using a deterministic black oil simulation.
    This statement has been compiled by New Zealand Oil & Gas Vice President of
    Operations and Engineering Andrew Jefferies B Eng (Mech Hons), Msc Pet. Eng.,
    MBA, a Society of Petroleum Engineers Certified Petroleum Engineer with over
    23 years of industry experience, and accurately reflects the most current
    information supplied by the joint venture operator.
    
    John Pagani
    External Relations Manager
    +64 21 570 872
    End CA:00250130 For:NZO    Type:MINE       Time:2014-05-06 12:03:08
    				
 
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