AWE Quarterly Report - TUI
AWE have just posted their quarterly report on ASX. Here are their forward-looking comments on Tui:
The Tui Area Oil Project started production on
July 30, 2007. This was a major milestone for
AWE and the Tui joint venture with production
commencing only 19 months after the investment
decision. The project delivery represented only
a minor delay on the schedule defined at the
timing of the Final Investment Decision. Final
capital expenditure on the project is estimated
at US$269 million.
The offi cial opening of the Tui Area Oil Project was
celebrated on August 16, 2007. The Prime Minister
of New Zealand, the Right Honourable Helen
Clark, was present for the opening ceremony in
New Plymouth, which was coincidental with the
first oil lifting from the project.
The final development well in the project was
completed at the start of the quarter. The Pateke-
3H ST1 well was completed as a producer with
an 819 metre horizontal section drilled in the
Kapuni oil reservoir, as planned. Pateke-3H
was successfully brought into production in early
August.
Oil production for the quarter was approximately
2.4 million barrels (AWE share approximately
1.0 million barrels) or an approximate average
rate of 38,500 bopd for the 62 days since the
commissioning phase began. To the end of
October, the project has produced approximately
3.5 million barrels of oil, and based on this strong
performance, AWE confi rms its production target
to produce 10 million barrels for the project in the
fi nancial year ended June 30, 2008.
The four producing wells currently have substantial
surplus deliverability in excess of the processing
capacity of the Umuroa. The vessel has a
current oil processing capacity of approximately
48,000 bopd, which is slightly below the nominal
nameplate capacity of the vessel. Further
commissioning of the production system is
ongoing.
AWE’s net oil sales for the quarter was
approximately 0.5 million barrels. The difference
between production and sales was due to the
initial build-up of oil inventory, which is not
recognised as revenue until title and risk pass to
the buyer. This is a common situation with new
offshore projects. Accordingly, this production will
be recognised as revenue in the next quarter.
In August 2007, AWE announced the preliminary
review of the proved and probable oil reserves,
which increased from 27.9 million barrels to 32
million barrels. The 15% increase in the 2P
reserves is based on the preliminary post-drill
mapping of the Tui, Amokura and Pateke oil
fields. A more comprehensive reserve study
incorporating production trends from the wells
and the re-processed 3D seismic data has also
commenced and is expected to be completed by
the end of December, 2007.
AWE and Shell Todd Oil Services recently
executed a second “shared services agreement”
involving the use of helicopters by both operators
in the offshore Taranaki Basin. Following the
success of the agreement on offshore support
vessels, the new helicopter agreement is
expected to offer additional cost savings to both
joint ventures.
During the quarter, the Taranui-1 exploration well
was drilled to a total measured depth of 3,915
metres. Taranui-1 was located approximately 15
kilometres north east of the Tui Area Oil Project.
The well intersected oil shows in both the Kapuni
D and F sand sections, with an oil sample being
recovered from the D Sand. Initial interpretation
of these zones indicates that the oil zones are not
commercially significant. The well was plugged
and abandoned.
Subsequent to the end of the quarter, AWE, as
operator of the Tui Area Oil Project, was informed
by New Zealand authorities that degraded oil, in
the form of tar balls, has washed up on a stretch
of beach on the country’s Taranaki coast. AWE
has also identified an incident that occurred on
the Floating Production Storage and Offloading
vessel Umuroa on October 21, 2007, which
could be related to the oil which has been found
on the Taranaki coast. AWE is working closely
with New Zealand authorities, including Maritime
New Zealand and the Taranaki Regional Council,
to identify the nature and source of the oil and
continues to work closely with the authorities
to assist in the clean-up process. AWE is also
undertaking its own investigations, which are
continuing.
www.theage.com.au/news/business
Peter Stachan, a leading oil analyst is forecasting further tightness and is recommending investors buy energy stocks, in particular Australian and New Zealand oil stocks.
There arent too many oil stocks on the NZX so I presume he means NZOG.
The Tui economics are getting better everyday and with an oil price as high as $US94 /barrel the income from Kupe liquids will easily be more than half the revenue from this field.
Also if you would like a really good prognosis on what is happening to today's oil markets please read
www.energybulletin.net
Peak oil Oct29
Kenneth deffeyes "Feedback Loops"
Maybe NZO should follow SKC's lead
Go Hoop - heres an idea - the blissful blind & the persistent miserable NON-HOLDING slaggers all agree on one thing - management are hopeless
Maybe they should invite bids from interested parties & let them do due diligence before making an offer?
Auction off NZO to the highest bidder - we all should contact Australian companies & suggest they do starting with AWE
Further Update On Discharge Incident
New Zealand Oil and Gas Ltd (NZOG) has been advised by AWE Ltd, the operator of
the Tui Area Oil Project, that the clean-up of oil along a section of the Taranaki coast has
been completed.
While Maritime New Zealand is conducting further tests, the Tui Joint Venture accepts
that the source of the degraded oil was a discharge of oil-contaminated water from the
Floating Production, Storage and Offtake vessel Umuroa on Sunday 21 October.
Immediate measures have been taken to guard against any repeat of this incident.
Production operations at Tui have continued uninterrupted since the incident. The
integrity of the production wells and facilities is not in question.
AWE is co-operating fully with Maritime New Zealand and the clean-up costs will be met
in full. These costs are not expected to be material. A decision on whether or not there
will be any further action lies with Maritime New Zealand.