Truck-mounted rig planned for Kiwi development drilling

Cheal permit operator Indo-Pacific Energy is bringing a truck-mounted rig from the United States to re-enter and test the Cheal-1 well and perhaps drill other shallow, onshore Taranaki wells in the future.

Company chief executive Dave Bennett told EnergyReview.Net that Indo-Pacific hoped to perhaps halve overall drilling, testing and production costs for Cheal-1, which was a shallow Miocene-aged Mount Messenger well, by adopting a number of cost-saving measures, including using the truck-mounted rig.

Indo-Pacific had had an almost 50% success rate with its recent shallow wells and would be looking at possibly using the truck-mounted rig for future exploration efforts.

In a few weeks, Indo-Pacific is planning to start a month-long production test of Cheal-1 - one of two wells drilled into the Cheal prospect in 1995 by a New Zealand Oil and Gas-led consortium in licence PEP 38738.

"We see Cheal as a gas field with some oil as more gas flowed to surface during previous testing than oil, but there was also some crude produced, along with the condensate."

Bennett said Cheal was situated very nicely for development, with several existing pieces of infrastructure nearby. To the north was Swift Energy's Tariki-Ahuroa gas treatment plant, to the northeast was Swift's Waihapa production station, and west was NGC's pipeline which supplied raw Kapuni gas to the Methanex methanol facilities.

The nearby Eltham-Kapuni area also contained a number of agricultural-related industries, which might be able to take gas from Cheal if modelling showed reserves to be above a minimum economic threshold.

Bennett was more confident about the recent Kahili discovery, however, saying a preferred development option could be finalised within the month.

The Kahili-1B sidetrack well, in nearby licence PEP 38736, was expected to be in commercial production by mid-2003, with gas pipeline tie-in and electricity generation options presently being assessed.

Significant upside potential existed as the Kahili-1B discovery was separate from the oil pool discovered by the earlier Kahili-1 well and there were good opportunities for the discovery and development of other gas or oil pools within PEP 38736.

Indo-Pacific holds 45% equity in Kahili, with Aussie partners Tap Oil and Claire Energy holding 30% and 25% respectively.

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