US independent makes new Taranaki gas discovery

Westech Energy has made another commercial discovery in one of its small onshore Taranaki licences.

Westech Energy has made another commercial discovery in one of its onshore Taranaki licences.

The Colorado-based company today released details of its expanded Surrey well program in PEP 38734, including plans to drill the Surrey-2 appraisal well as soon as possible and to bring the Surrey and nearby Windsor wells into commercial production shortly.

Westech said its New Zealand subsidiary, which holds a 100% interest in the permit PEP 38734, had completed the Surrey-1 well as an oil and gas producer from the shallow Miocene-aged Mount Messenger sands.

The well was drilled to a total depth of 1935m and a gross reservoir of 25m, from 1610m to 1635m, was found to contain an 11m net hydrocarbon column near the top of the zone. A confirmatory production test, from 1615m-1618m, flowed 116 barrels of (30 degree API) oil and 1.26 million cubic feet of gas per day with no water. This was on a 1/4 inch choke and at a flowing tubing pressure of 1240 psi.

The gas was dry gas, composed of 97.1% methane (C1) and 2.16% ethane and higher (C2+) hydrocarbons, with no hydrogen sulphide (H2S) and negligible carbon dioxide.

Company president Ed Davies said from Denver that Westech was very pleased to have struck hydrocarbons again in another of Westech’s onshore Taranaki licences.

He hoped Westech could repeat its 2000 success in the adjoining PEP 38732, when two of three Windsor wells drilled resulted in commercial gas flows. Then Westech completed the Windsor-1 and 3 wells as Mt Messenger gas producers. The Winsor-2 well, which had been drilled into a separate reservoir proved to be a dry hole. All wells, which were Westech’s first for the Taranaki Basin, were drilled and deviated from the same pad. However, the company did not release detailed flow rates at that time.

The OD & E Rig 19 is proving to be a lucky rig for Westech as it drilled first the Windsor and now the Surrey wells.

Davies said he expected the Surrey-1 well to be placed on production shortly, following an agreement on a gas sales contract. The perforated interval would be expanded prior to production and it was anticipated that the Windsor-1 and 3 gas wells, located 8km north of Surrey, would be produced under the same gas contract.

There have been rumours circulating the Taranaki energy industry that Kaimiro operator Greymouth Petroleum is keen to transport hydrocarbons from the Surrey and Windsor wells to the nearby Kaimiro production station for on-sale, with Greymouth marketing all gas and liquids produced on behalf of Westech. Likely gas buyers were believed to be Contact Energy for use in its aging New Plymouth power station.

Greymouth principal John Sturgess told EnergyReview.Net that Greymouth and Westech had earlier this year talked about transporting hydrocarbons to Greymouth’s Kaimiro plant.

Although there had been no recent discussions, Greymouth was still keen to process Surrey and Windsor hydrocarbons for Westech at Kaimiro. This would be on a similar basis to its recent offer to fellow Ngatoro partners New Zealand Oil and Gas and Indo-Pacific Energy _ whereby Greymouth would operate the Ngatoro well sites remotely, processing Ngatoro hydrocarbons at Kaimiro and selling Ngatoro gas on behalf of the partners. This would be for a 15% real rate of return on Greymouth’s capital invested.

Westech downstream operations director Kevin Johnson said that no gas sales contracts had yet been finalised. Contact Energy was a possible purchaser of Surrey and Windsor gas, “but we will discuss with any or all interested parties.”

The Surrey- 2 appraisal well is to drilled 1.2km south of Surrey-1 as soon as Westech NZ can obtain the necessary resource consents.

Westech Energy New Zealand is a wholly-owned subsidiary of the privately-held Energy Corporation of America based in Denver, Colorado.