Greymouth buys Westech onshore Taranaki assets

ENERGY Corporation of America is selling its interests in the small onshore Taranaki Surrey, Windsor and Radnor fields to private player Greymouth Petroleum so it can concentrate on other New Zealand priorities.
Greymouth buys Westech onshore Taranaki assets Greymouth buys Westech onshore Taranaki assets Greymouth buys Westech onshore Taranaki assets Greymouth buys Westech onshore Taranaki assets Greymouth buys Westech onshore Taranaki assets

Denver-headquartered ECA, which operates in New Zealand as Westech Energy, is selling its 100% interest in mining licence PMP 38159 (Surrey) and the nearby PMP 38152 (Windsor) to Auckland-headquartered Greymouth for an undisclosed sum.

It is also selling its 33.33% stakes in the Radnor gas-condensate field, which earlier this decade briefly flowed gas to the Methanex methanol plant in Waitara, and the adjoining exploration licence PEP 38751.

Canadian-listed junior TAG Oil operates the Radnor mining licence (PMP 38157) and PEP 38751 with 33.33% stakes in each, while private Auckland company Bridge Petroleum holds the rest.

“ECA remains committed to its activities in New Zealand but has refocused its priorities to offshore and the East Coast,” ECA business development vice president Denny McGowan told PetroleumNews.net from Denver this morning.

Greymouth chief of operations John Sturgess told PNN that the Westech acquisitions represented “a meaningful expansion of Greymouth’s onshore Taranaki oil and gas mining permit interests, infrastructure and acreage position”.

“These purchases will allow Greymouth to derive the permit consolidation and synergy benefits available from Greymouth’s other petroleum production operations and fields in Taranaki,” he said.

Greymouth already owns and operates the onshore Taranaki Kaimiro, Ngatoro-Goldie, and Turangi oil and gas fields.

Sturgess said Greymouth was also taking an assignment of gas contracting arrangements with Methanex and Vector subsidiary NGC.

Earlier this decade, Surrey flowed commercial quantities of gas for about two years, following a 2003 agreement between Westech and Vector for NGC to purchase at least 1 billion cubic feet a year of Surrey gas.

The discovery Surrey-1 well also initially flowed about 100 barrels of oil per day from shallow Miocene-aged Mount Messenger sandstones.

Four years later, the well is still producing about 50-60bopd of crude that is trucked to the Omata tank farm near Port Taranaki.

Sturgess added that the latest acquired permits had been the subject of extensive exploration but limited oil and gas production so far.

Greymouth’s planned exploration activities in these permits included drilling in PEP 38751 during the next quarter, and at least two wells in Radnor and Surrey over the next 12 months, following resolution of forward work programs.

Last month, New Zealand Government unit Crown Minerals granted Westech a Surrey mining licence for an initial 10-year term, with a commitment to well drilling and commercial production from next March.

There are presently no commercial flows from Windsor.

McGowan said Westech would now be concentrating on the onshore East Coast – where it has significant acreage and is soon to test the Waitahora-1 well – and offshore Taranaki, where it plans to utilise the Ocean Patriot rig to drill the Albacore-1 well later this year.

Waitahora-1 encountered encouraging signs, including unusually high reservoir pressure of up to 3500psi, earlier this year.

It is an offset to the Kauhauroa-1 wildcat well that in the late 1990s, gauged over 70 million standard cubic feet per day of gas during open-hole flow testing.

Westech earlier this year took over as operator of licence PEP 38491 from Houston-headquartered Transworld Exploration and Production.

Recent farminee, government-owned Mighty River Power, and Westech bought out Transworld and Bridge Petroleum. Westech now holds 33.33% equity and MRP 66.67%.

Sturgess further said Greymouth anticipated its market for spot, excess and shortfall gas to develop further over the next 12 months as gas customers became aware of the flexibility, price and other advantages of this market that Greymouth had operated since last October.

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