PMP 38160 and PEP 38413, Offshore Taranaki Basin, Maari Field (Horizon Oil interest: 10%)
In the quarter, 1.2 million barrels of oil were produced from the Maari field. Since the commencement of production to the date of this report, over 2.1 million barrels of oil have been produced, of which 2.0 million barrels have been lifted and sold. The Company has sold 209,000 barrels of Maari production to date, generating sales revenue of US$11.7 million.
The Maari development drilling program, being carried out with the Ensco 107 jack-up rig, was completed on 26 July 2009, considerably ahead of the forecast mid-August completion date. During the quarter, the 3 water injection wells - MR6, MR7 and MR8 - were drilled and equipped and are currently injecting water into the primary Moki formation reservoir to maintain reservoir pressure. Subsequently the MR1 production well was drilled and is currently flowing oil to the FPSO Raroa. The more complicated dual lateral MR2 well was also successfully drilled and equipped for production. It is expected to be hooked up and on stream by early August. Two of the production wells required short workovers to repair a damaged valve in the completion assembly. These were carried out on the MR3 well, which is now back on production and on the MR4 well, which should be back on line by the coming weekend.
During the development drilling phase, production was continually interrupted for safety reasons during lifting and other operations associated with drilling. Horizon Oil intends to advise shareholders on field production rates and performance in August, when all 5 oil production wells are on line.
Work on the wellhead platform and FPSO is essentially complete. The main focus has been on well hook-up and commissioning. Other activities included finalisation of installation contract work scopes, confirmation of all deliverables and close-out of outstanding commercial issues. Also during the quarter, the Maari joint venture approved drilling of an extended reach well to appraise the Manaia structure, which is located 10 km southwest of Maari (see map) and a development well to access the M2A oil reservoir at Maari, which sits above the primary Moki zone.
The decision to drill the additional wells was taken in view of the demonstrated good performance of the drilling rig and various teams, the favourable dayrate for the Ensco 107 and the consequence of extending project completion into October, placing rig demobilisation in a better weather window. [b]It is anticipated that the Manaia-1 will spud this weekend and take 45 days to drill.[/b] The horizontal completion section of the well in the Mangahewa formation is planned to be up-dip of the Maui 4 discovery well drilled in 1970, which flowed 575 bopd from a vertical exploration well through that zone. Two additional oil accumulations were encountered in the Moki formation but were not tested at the time. If warranted, the well will be equipped for production and flowed to the FPSO, using gas-lift. The M2A well will be drilled thereafter and is expected to take 27 days to complete.
----
[b]The M2A zone at Maari has now been penetrated by 12 exploration, appraisal, producer and injector wells, is well understood and has been mapped with a significantly higher oil-in-place than was anticipated before commencement of the development drilling program. It is intended that the well will be completed as a producer and put on intermittent production as allowed by available production facilities.[/b]
CUE Price at posting:
18.0¢ Sentiment: Hold Disclosure: Held
(20min delay)