Cheal-1 production test positive in New Zealand

By OGJ editors

HOUSTON, Nov. 7 -- Indo-Pacific Energy Ltd., operator of the Cheal-1 well in the Taranaki basin—on the west coast of New Zealand's north island—initiated a successful production test of the well Oct. 20 (OGJ, Oct. 20, 2003, p. 47). Oil has flowed at an average of 70 b/d through a 5/8-in.choke to on-site production and storage facilities. The production test continued for 8-10 days, also producing natural gas at a constrained rate of 1 MMcfd.

"While this test was intended to establish Cheal as a producing gas field, we are delighted with the oil rates also being achieved," said CEO Dave Bennett. The oil is exported via truck tankers to the nearby TAWN production station under a short-term marketing agreement with Swift Energy Co.'s unit Swift Energy New Zealand Ltd, operator of that facility. Indo-Pacific, incorporated in Yukon, Canada, but based locally in Wellington, owns a 33.5% interest in Cheal-1.

The production test was designed to provide estimates of the gas volumes in the reservoir accessed by Cheal-1 so that decisions on a gas export pipeline could be made.

Indo-Pacific said several options for the pipeline were under consideration, including connections to the TAWN plant, to NGC Corp.'s regional pipeline system, or to Contact Energy Ltd.'s gas-fired power station, about 4 miles to the north.

The well now will be shut in for a week to analyze the downhole pressure gauges. If these show a critical reserve level, a similar test will be conducted immediately on Cheal-2, a well drilled east of the site in 1995 that flowed gas and oil on test from the same sands.

Taranaki basin potential
The 100,000 sq km Taranaki rift complex is partially overlain by Quaternary volcanic rocks of the Taranaki Peninsula. The basin consists of several depocenters containing as much as 9 km of Cretaceous-Cenozoic sediments (OGJ, July 16, 2001, p. 38).

Indo-Pacific plans to delineate the Cheal productive area with another well to determine the quality of the oil and gas sands and the oil potential of the underlying shallow Mount Messenger sands that form a separate reservoir target.

The Mount Messenger formation, overlain by impermeable mudstones of the Manganui formation, exhibits porosities of 14-25% and average permeabilities of 135 md. It has produced petroleum in Kaimiro and Ngatoro fields, and even the shallow sands in the Pliocene Matemateonga formation at Moturoa produce oil. Cheal-1 flows hydrocarbons from the Mio-Pliocene Urenui formation.

Indo-Pacific will drill the third well a short distance to the north of Cheal-1 in early 2004. It said production facilities were designed to handle the likely total output from all three wells.

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