Swift financial results mask fall in NZ gas output

US PETROLEUM junior Swift Energy has announced record third quarter net income of $US50.8 million ($A65.7 million), but its New Zealand gas production is continuing to decline.

The Houston-headquartered company today said overall production increased 39% for the third quarter of 2006 to a record 18.8 billion cubic feet equivalent (Bcfe), from the 13.5Bcfe of the hurricane-affected third quarter of 2005.

Third quarter production was also up 15% on the 16.3Bcfe produced during the second quarter of 2006.

While third quarter production included record US production of 15.2Bcfe, a 67% increase on the corresponding 2005 quarter, New Zealand production fell 19% to only 3.5Bcfe.

But the New Zealand financial result was up 12% on the previous quarter, due to additional crude oil sales during the latest period.

The company’s New Zealand McKee blend crude oil sold for an average $US70.49 per barrel, compared with $61.23/bbl for the same 2005 period.

The average realised price of the company’s New Zealand natural gas was $US3.04 per thousand cubic feet, a 1% decrease on the $3.08 per thousand cubic feet received in the comparable 2005 period. Natural gas liquids yielded an average price of $20.09/bbl, compared with $19.50/bbl, a 3% increase.

Swift Energy drilled three New Zealand wells during the latest quarter, striking paydirt with one, suspending operations on another, and plugging and abandoning the third.

It completed the Waihapa-H1 well, which targeted fractured Tikorangi limestones in the TAWN (Tariki, Ahuroa, Waihapa and Ngaere) area, and brought that into production. But it suspended the Waihapa-4 sidetrack for mechanical reasons until next year.

Industry sources told PetroleumNews.net in September that Waihapa-H1 flowed at rates close to 2500 barrels of oil per day (bopd) before being choked back to avoid formation damage to the limestones.

When the Waihapa field was discovered in 1988, it flowed at rates exceeding 10,000bopd, making it one of the best producing onshore fields in New Zealand or Australia. But formation damage and water cuts later led to production dropping drastically to less than 1000bopd earlier this decade.

Swift said it had plugged and abandoned Kowhai-A1, in PEP 38742, its first onshore Taranaki deep gas well with partner Ballance Agri-Nutrients, owner of New Zealand's sole ammonia urea plant.

The company had also planned to complete Trapper-A1 – one of the onshore Taranaki wells drilled with downstream player Mighty River Power – in the Tikorangi Formation, but mechanical difficulties meant it was now plugging and abandoning that well.

But it planned to complete the nearby Goss-A1 well – another Swift Energy-MRP venture – in the Tikorangi Formation for testing and evaluation.