June 5 Update from Bligh:
DRILLING ACTIVITY AND PROJECT STATUS REPORT
NEW ZEALAND - PEP38719, Taranaki Basin, Bligh Interest: 5.00%
The Kauri-1 exploration well is currently drilling ahead in 12 ¼" hole, at a depth of 2624 metres.
Kauri-1 is being drilled to a total depth of 4500 metres to evaluate the Tariki sandstone, Rimu limestone and Cretaceous sandstone reservoirs within upper and lower thrust blocks in the large Kauri structure. The well is expected to take a further 20 days to reach total depth.
The Kauri structure is situated immediately south of the Rimu structure, extending in part offshore. The Tariki sandstone and Rimu limestone reservoirs, which flowed oil and gas in the Rimu structure, are to be intersected approximately 200-400 metres high to their intersections in the Rimu wells. It is considered likely that the Rimu and Kauri structures could be laterally continuous, and the Kauri well has the potential to lift the reserve potential of the trend into the range of 100-150 million barrels of oil equivalent.
Production testing has begun at the Rimu 'A' pad. The Rimu A-1 well began production testing on May 31 at an initial rate of 607 barrels of oil per day and 2.1 MMcf of gas per day with no water from the Upper Tariki sandstone reservoir. This well will be flowed for approximately 90 days at various rates. Additional production testing will also be conducted on the A-2 and A-3 wells.
The Rimu A-3 well has been perforated over an interval of approximately 38 metres in the Upper Tariki sandstone that is located approximately 45 metres updip from the same zone in the A-1 well. Based on pressure tests conducted on the various Tariki sandstone completions and the information obtained from the full diameter cores taken while drilling the Rimu A-3, a "mud-clean-up" acid treatment is necessary before final completion. Prior to final completion, the well tested at an average flow rate over five days of 67 bopd and 294 Mcf per day with 19 barrels of water per day. The final completion of this zone will commence as soon as the analysis for the optimal method of stimulation is completed.
The Rimu A-2 well, which is approximately 98 metres downdip at the Upper Tariki sandstone level in the A-1 well, was initially perforated in the lower 25 metres of this reservoir interval and has confirmed that a water zone is present at this depth. These perforations have been isolated, and operations are currently underway to perforate the top 5.5 metres of the Upper Tariki sandstone in this well bore. The confirmation of a water zone confirms the downdip limit of oil in the Rimu structure and further indicates that the Upper Tariki oil discovery may be supported by an aquifer system, which could improve the ultimate recovery.
Limited production testing from the Upper Rimu limestone has also been conducted from the wells at the Rimu 'B' pad. The Rimu B-1 well was tested over a 23 day period and produced at an average rate of 271 barrels of oil and 3.4 MMcf of gas with 146 barrels of water per day. Analysis of production logging measurements indicates the water production is coming from a zone below the current perforations. Subsequent operations on the Rimu B-1 completion will attempt to eliminate the water production. The Rimu B-2 well was tested over a 13-day period and produced at an average rate of 256 barrels of oil and 6.0 MMcf of gas with 8 barrels of water per day. Further testing of the 'B' pad wells will commence when facilities are available.
Location clearing has commenced, in advance of construction of the Rimu production station. The facilities are being designed for an initial throughput of 3500 barrels of oil per day and 10 million cubic feet of gas per day, with easy modular upgrade to a capacity of 7500 barrels of oil per day and 20 million cubic feet of gas per day. As previously announced, a gas contract has been agreed, under which the first 10 million cubic feet per day is already committed.
Marabella Enterprises Limited, a wholly owned subsidiary of Bligh holds a 5% working interest in PEP 38719 where the Rimu discovery is located, which covers 100,652 net acres extending both onshore and offshore on the western coast of the northern island of New Zealand. Partners are Swift Energy New Zealand Ltd. (operator, 90% working interest) and Antrim Energy Inc (5% working interest).
NEW ZEALAND - PML 38141, Taranaki Basin. Bligh Interest: 1.62% |
