Explorers take heart from gas discoveries

BY FIONA ROTHERHAM

The Westech and Orion joint venture, which had an important gas find near Wairoa in 1998, is focusing exploration on a new gas discovery in the same area and on searching for oil offshore, predominantly in Hawkes Bay.

The joint venture also announced yesterday at the 2000 NZ Petroleum Conference in Christchurch that it had lined up a partner - an electricity generator it declined to name - to consider building a power plant in Wairoa for long-term testing of gas flows at its original well.

The go-ahead on the proposed 25 megawatt to 50 megawatt combined cycle plant awaits further drilling to determine the site with the best commercial potential.

Westech and Orion have drilled six exploratory wells and five appraisal wells in the onshore East Coast Basin in the past two years.

All wells showed significant gas with two - the existing find, Kauhauroa, and a nearby new one, Tuhara - having hydrocarbons in likely commercial volumes.

While coy about potential volumes, Westech said when the Kauhauroa find was made the potential was for several hundred petajoules of gas.

More work needed to be done on Tuhara before any estimates of potential could be given, said Westech Energy managing director Ed Davies.

The joint venture has decided to downgrade its attention on the Awatere gas find and focus on Tuhara and the offshore prospects, in part to meet its work programme commitments under its various exploration permits in the frontier basin, and because that is where the best potential is seen.

It plans to drill another well at Tuhara mid-year that will deviate offshore, subject to permits. Tuhara is structurally different and more stable than Kauhauroa.

Analysis of offshore 3D seismic surveys covering 600 sq km identified 12 hydrocarbon prospects ranging from 20 sq km to 90 sq km with the potential for large commercial discoveries.

Beyond that, it is estimated that as many as 35 separate structures could be capable of producing oil or gas within the joint venture's permit areas in the basin.

"We have high expectations for offshore," said Mr Davies.

Work on Kauhauroa is on hold pending the outcome of the Tuhara drill.

Mr Davies said Kauhauroa was over-pressured. It had what was believed to be the world record for high formation pressures in a hydrocarbon reservoir at such a shallow depth.

The major advantage from the over-pressure is it will concentrate 2.5 times the gas reserves of a normally pressured, comparable reservoir. The downside is higher drilling costs and the safety issues.