Swift rethinks NZ operations

TEXAS-based Swift Energy is cutting its New Zealand capital expenditure and drilling program this year following disappointing exploration results in 2006.
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Last year the company spent about $US57 million ($A72.4 million) in New Zealand. This year it expects to spend about $35-40 million.

During 2006, its New Zealand output dropped 18% from 16.5 billion cubic feet equivalent to 13.5Bcfe, while its proved reserves declined by 10%, from 118Bcfe to 106Bcfe as the result of natural declines in both oil and gas and a lack of reserve additions from its onshore Taranaki drilling program.

The company told its annual analysts-investors meeting in Houston today that it would be focusing on additional geologic and geophysical field studies during the year, and on reviewing a potential 3D seismic shoot planned for the Tariki, Ahuroa, Waihapa and Ngaere fields in central onshore Taranaki.

It also said it might drill up to two further wells during 2007 in the problematic Waihapa field that gushed more than 10,000 barrels of oil per day (bopd) from fractured Tikorangi limestones in the late 1980s, making it one of the best producing onshore fields in New Zealand or Australia at that time.

Last year Swift Energy drilled the Waihapa-H1 well from a new wellsite. The well initially flowed at rates close to 2500bopd but those flows could not be sustained.

In addition, Swift Energy last year successfully completed three of four development wells in onshore Taranaki but was unsuccessful with five wildcat exploration wells, including three drilled in conjunction with government-owned Mighty River Power targeting Eocene-aged deep gas targets.

The pre-tax net present value of Swift Energy’s proved New Zealand reserves at the end of 2006 totalled $US264 million.

Company president Bruce Vincent has said the pace of drilling in New Zealand may pick up again in 2008 following the completion of planned field studies and some “value-adding” infrastructure projects.