Pohokura confidence wells

Fletcher Challenge Energy says further appraisal of its coastal Pohokura discovery in Taranaki increased its confidence in reserve estimates, although it has not changed them.

"Preparations are under way for a 3D seismic survey to be conducted at the end of this year, and for a third well to be drilled to test the southern extent of the field in early 2001," the company said in its September quarter production report released yesterday.

"While no adjustments have been made to the booked reserves, statistical confidence in the probable reserves profile is increasing."

Fletcher Energy estimates proven reserves - where there is a 90 per cent confidence behind the figure - at 392 billion cubic feet (bcf) of gas and 17 million barrels of condensate.

The average of all potential outcomes is 750bcf of gas and 40 million barrels of condensate.

Fletcher Energy said production of oil and gas across all its wells fell slightly in the September quarter, to 12.9mboe from 13.08mboe in the 1999 period. The primary reason was shutdowns related to development of the Maui BD oil project off the Taranaki coast.

Among the highlights for the quarter, Fletcher Energy said gas production in Canada was up 11 per cent over the corresponding quarter in 1999, Canadian oil production rose 5 per cent, and Maui oil production increased 13 per cent over the previous June quarter as contributions from the Maui BD oil development project began.

Gas production from the giant offshore Maui field was up 8 per cent on the June quarter. The company said the trend for the past 18 months was for higher gas sales - Methanex continues its high usage and electricity generators have used more gas since deregulation of the industry in early 1999.

Fletcher Energy closed on the Stock Exchange up 1c at $8.25. It took a hit when the Commerce Commission declined Royal Dutch Shell clearance to buy it. Shell is almost certain to present a reworked proposal in the next few weeks.

- NZPA