Taranaki oil hopes high

By FIONA ROTHERHAM

Houston-based Swift Energy will spend nearly four times more on exploration this year in its South Taranaki oil prospects.

The company's New Zealand budget will expand from $5.6 million to more than $20 million following the oil and gas find in its Rimu-A1 well and identification of the Kauri and Tawa prospects in the same permit area.

Holders of adjoining permits are also reviewing their Tariki sands prospects.

Swift said last month that the estimated reserve potential for Rimu was between 20 to 100 million barrels of oil equivalent. It also estimated that the other two undrilled prospects within PEP 38719 could be even larger.

The company has secured a rig to drill an appraisal well at Rimu in early July. It has also ordered pipe for this and two other wells, one of which will be an exploratory well for the Kauri prospect later this year.

Seismic testing under way over more than 130km on and offshore will help determine the best well locations. Swift is preparing engineering studies for processing facilities and is in discussion with potential oil and gas purchasers. It hopes production from Rimu will begin next year.

Company estimates of Kauri's total potential are between 200 and 500 million barrels of oil equivalent.

On the Tawa prospect, where reserve potential is estimated at between 100 and 300 million barrels, an exploration well is expected to be drilled in late 2001 or early 2002.

Swift Energy holds a 90 per cent interest in the permit. Antrim Oil and Gas and Marabella Enterprises, a subsidiary of Brisbane-based Bligh Oil and Minerals, each hold a 5 per cent interest.

Bligh operates the two exploration permits immediately north of Rimu: PEP 38728, in which it has a 100 per cent interest, and PEP 39716, whose six partners include Swift.

Bligh said it had remapped both permit areas. The joint-venture partners are considering re-entry of the Huinga-1 well drilled last year in order to deepen and test for Tariki sandstone.

"Rimu caused us to go back and have a second look with a somewhat different perspective," said exploration supervisor Terry Russell.

Fletcher Energy holds PEP 38718 to the north of the two Bligh areas. It had already identified the Tuihu prospect in that area and is obliged under the permit to drill a well by the end of this year.