New Zealand exploration plans proliferate

Spectrum's Taranaki License [275,845 bytes]

Spectrum Exploration Ltd., New Plymouth, N.Z., and Fletcher Challenge Energy (FCE), Auckland, have formed a joint venture to explore the Taranaki basin off the western coast of New Zealand's North Island.

New Zealand's Commerce Ministry awarded the JV an exploration permit for License PEP38462.

The Taranaki basin extends from the northern tip of the South Island to near Kawhai on the North Island. The JV licensed a 5,966 sq km area just north of Maui field (see map, this page).

Meanwhile, FCE has three onshore New Zealand exploration/appraisal projects under way. One of these is in Mangahewa field, which is producing gas and condensate while FCE continues its exploration program there.

The new license

Operator and 80% owner in License PEP38462 is Spectrum Exploration, a new company specializing in mathematical analysis of oil migration. FCE's interest in the license is 20%.

Fletcher will provide primarily technical and engineering support on the project.

"Recent investigations by geoscientists, both in the oil industry and New Zealand scientific institutions, together with discoveries in the Maui field, have led to a recognition of the potential for significant oil reserves in the area," said FCE.

Work in the first year of the joint exploration program will involve specialized reprocessing of seismic data and computer-based modeling of oil generation and subsequent migration to areas of trapping.

The JV expects to conduct seismic surveys in 1998 and drill its first well in 2000.

FCE's Mangahewa field

FCE has a 100% stake in Mangahewa field, about 25 miles east of New Plymouth (see map, OGJ, Oct. 27, 1997, p. 81). The producing field is the focus of a continuing appraisal program.

FCE placed Mangahewa-2 well on long-term test in December. As of late January, the well was flowing 17.5 MMscfd through a 23/64-in. choke with flowing pressure of 4,390 psi. The well also is producing 235 b/d of condensate and 39 b/d of water.

FCE has installed temporary gas processing facilities. The produced gas is being sold to Methanex New Zealand Ltd., and the condensate is being processed at the nearby McKee treatment plant.

FCE plans to drill at least two appraisal wells in Mangahewa this year and four in 1999. Full development drilling will follow in 2000.

An extensive 3D seismic survey of the field is under way. The $7 million (New Zealand) program is reported to be New Zealand's largest yet.

The seismic survey is too large to be completed during New Zealand's weather window, so FCE will identify "sweet spots" for drilling during the summer 1998 work. The company also will drill a coastal well to determine whether Mangahewa extends offshore.

FCE may spend as much as $250 million (N.Z.) on Mangahewa development. The company's plans include building a large gas processing plant. Commercial production is slated to begin in 2000.

Other onshore exploration

FCE also is exploring the Kaimiro license area, about 20 miles southeast of New Plymouth. FCE holds a 100% interest in this license.

The company's Kaimiro-16 well reached target depth of 1,717 m in fourth quarter 1997. The well cut 14 net m of oil-bearing sands in the Mount Messenger formation. Production of 170 b/d of oil was tied into the Kaimiro production station in December.

In license area PML 38319 on the east coast of New Zealand's North Island, FCE's Piakau-2 well reached target depth of 2,349 m in fourth quarter 1997. In November, the well flowed on test 80 b/d of oil and 1.1 MMscfd of gas.

After completion of a pressure buildup test, FCE suspended the well to conduct an in-depth analysis of the data.

Maui decline

Liquids production from FCE's Maui F and D sands has fallen to about 11,300 b/d.

"A number of projects are under way to enhance production, with the most significant being the doubling of water-handling capacity, which is scheduled for completion (this month)," said the company. "This, along with the reworking of at least one existing well, is expected to boost short-term production.

"In the medium term, a project to drill additional wells into the F and D sands from the Maui B platform is being progressed. If it proceeds, drilling will commence, at the earliest, late in 1998."