KEY POINTS:
New Zealand Oil & Gas said today oil reserves for the Tui Area Oil Project had been increased to 41.7 million barrels, 30 per cent above the previous estimate and nearly 50 per cent above pre-development predictions.
The new figure for proven and probable reserves compares with estimated reserves of 27.9 million barrels on which the Tui project in off-shore Taranaki was first sanctioned, and an interim re-estimate of 32 million barrels following completion of the development drilling campaign.
NZOG has a 12.5 per cent share of Tui. Its share of the reserves has increased from 3.5 million barrels (pre-development) to 5.2 million barrels.
The field produces a light sweet crude that is generally sold, with freight and quality differentials, against the Tapis benchmark crude, which has recently surpassed US$100 ($135.06) a barrel.
That means the upgrade at current prices had a gross value of more than $200 million.
The increase in reserves follows a reassessment of the field by the operator (AWE) based on interpretation of re-processed 3D seismic data, a more detailed assessment of the Kapuni reservoir and the integration of the production data from the fields since production began in July, the company said.
The increased reserves assume production from the existing four wells, plus the completion of an additional development well in the Tui field. Preliminary planning for drilling of this well has begun, with drilling targeted for 2009.
Since July 30 the field has produced 4.4 million barrels of oil and production rates of up to 50,000 barrels a day had been achieved.
Based on the current reservoir and facility performance and the upgrade in reserves, AWE has revised the Tui gross oil production for the year to June 30, 2008 up from 10 million barrels to about 11 million barrels (about 1.4 million barrels net to NZOG).
NZOG shares jumped 9c (9 per cent) to $1.10 on the news.
- NZPA
