AWE starts drilling Oi-1
AWE Limited (ASX: AWE), as Operator of Petroleum Mining Permit 38158 offshore Taranaki, New Zealand, advises that the semi-submersible drilling rig “Kan Tan IV” commenced drilling the Oi-1 exploration well at 18:30 hours (6.30pm) NZDT on Friday, 30 May 2014. The Oi-1 exploration well is
located approximately 12 kilometres northeast of the Tui Area Oil Fields in water depth of approximately 120 metres.
As at 06:00 hours (6.00am) NZDT today, operations had run and cemented 30 inch casing to 229 metres and was drilling ahead in a 17 ½ inch hole at a depth of 510 metres.
The Oi-1 exploration well will be drilled vertically to a planned total depth of 3,881 metres. The well objective is to evaluate the hydrocarbon potential of a 4-way dip closed structure similar to the producing Tui, Amokura and Pateke fields and it will target the same F10 reservoir sandstones.
The Oi prospect, in a discovery success case, represents a best estimate Prospective Resource of 11 million barrels of recoverable oil (gross, unrisked P50 estimate). AWE is participating in the Oi-1 exploration well at a reduced equity of 31.25% and has the option to increase its equity participation in any future appraisal drilling and development to 57.5% by exercising existing buyback provisions.
Gross dry hole drilling costs are estimated at USD 27 million (net USD 8.4 million to AWE at 31.25%) and the well is expected to take approximately 30 days to complete.
In the event of a commercial discovery, it is envisaged that any subsequent development of the Oi field would involve a tie back to the nearby Tui production facility, the FPSO “Umuroa”, where sufficient production capacity is available.
The Joint Venture partners in PMP 38158 are:
AWE Limited (via subsidiaries) (Operator) 57.50%
New Zealand Oil & Gas (via subsidiaries) 27.50%
Pan Pacific Petroleum (via subsidiaries) 15.00%
The Joint Venture partners in the Oi-1 exploration well are:
AWE Limited (via subsidiaries) (Operator) 31.25%
New Zealand Oil & Gas (via subsidiaries) 18.75%
Pan Pacific Petroleum (via subsidiaries) 50.00%
Source: AWE Limited