Cardiff well tests start positively

Tests at Austral Pacific's Cardiff gas well have got off to a good start with the scrutiny of natural gas flows expected to begin this week.

The company told the stock exchange yesterday it was about to start testing the on-shore Taranaki well, first drilled in January.

It expected to see the first flows by the weekend and a report would detail results once a stable flow had been achieved.

Austral is starting a process known as hydraulic fracturing - where fluid is pumped at high pressure down a well hole. This "fractures" the surrounding rock formation, which can boost the flow of oil and gas up to the surface.

Last month, Austral Pacific described testing results at Cardiff and the Cheal oil well as defining moments in the life of the company.

There was "every reason" to expect the Cardiff and Cheal properties would be independently confirmed as having significant hydrocarbons.

Much speculation and hype surrounds the Cardiff well, 30 per cent owned by Austral Pacific and 40 per cent by state-owned power company Genesis.

Tests have already shown hydrocarbons are present, but Austral needs this pressure and flow testing to see whether commercial quantities of gas can be obtained from the well.

The testing programme will cost about $3.5 million and is being funded by Genesis.

* Austral Pacific is listed locally and on the TSX Venture Exchange (part of the Toronto Stock Exchange). Its shares closed unchanged yesterday at $4.50 each.