This strategic well involves major New Zealand downstream player Genesis Energy, which hopes the Cardiff prospect will contain 400 bcf of gas, enough to fuel its mooted Kaipara gas-fired power station project north of Auckland for 20 years or so.
Analysts also say Cardiff is Austral’s biggest project and its success or failure will have a major impact on the company and its share price.
The Wellington-headquartered company yesterday released preliminary test results to the NZSX, saying the Cardiff-2A well continued to lift gas plus condensate, oil and completion fluid, from the two upper Eocene-aged Kapuni formation test zones.
There was a continuous gas flare, with gas rates exceeding one million cubic feet per day, with pressures and volumes rising steadily.
Today company chief executive Dave Bennett told EnergyReview.net that he was not disappointed by those early low flows.
“It is fair to say we are not actually currently flow-testing at all and hence the one million cubic feet is not really in any way indicative of what the well will flow when it is cleaned up," Bennett said.
“We put four thousand barrels of frac fluid away into the reservoir rocks and, by and large, it’s a case of ‘last in, first out’. Until we get most of that frac fluid out, we will not get a good representation of flow potential.
“Indeed, because fluid flow from tubing at surface is at present just replaced by fluid flow out of the reservoir into tubing, the pressure drawdown stays the same – so until we get all or most of this frac fluid out we will not improve the pressure drawdown, hence will not see a rate increase.”
Bennett said only about 1500 barrels of the 4000 barrels of the fraccing fluids had so far been recovered so it would be at least a week or so before any stabilised flow rates could be obtained.
The bottom and main pay zone, the K3 sands, remained shut-in because of damage to the completion tubing unit incurred while another operator was using it. So it could be even longer before that zone could be tested.
Shares in the listed company were down US$0.10 to US$2.89 on the AMEX yesterday but remained unchanged at NZ$4.37 on the NZSX.
The Cardiff-2A well is in licence PEP 38738, with the deep (Eocene-aged or older) partners being operator Austral (25.1%), Genesis Energy (40%), Cheal Petroleum (15.1%) and International Resource Management (19.8%).
