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20 May 2010
Tui SW-2 Exploration Well Disclosure Notice
NZOG (New Zealand Oil & Gas Ltd) advises that during the last week, Tui SW-2
was drilled to a depth of 1507 metres. The 13 3/8" casing has been run and
cemented to a depth of 600 metres. This is shallower than was planned, and
was necessitated by continuing difficulty with unstable shallow sediments at
the Tui SW location. The contingency 9 5/8" casing will now be run to 1500
metres, before drilling ahead to target depth in 8 ?" hole.
Wonder if they should have moved a bit further away than just 35m for this new hole.
FFS....whats the go here? Sounds like unstable shallow sediments are like some sort of undersea graben.
Probably not. And that puts the kaibosh on the shatter zone theory - 35m should have been enough for that - it's a stratum problem. Of course - would be nice if there was some statement about what the in situ rock is - we are all guessing - - conglomerate? Talcum? Fairy dust?
Quite right we do need some explanation as to what this means.Without it the market will put the worst possible spin on things.True we can not expect to have our hand held all the time but this is special and what does it all add up to???
.It is beginning to look very negative for drilling this year.We are not only months behind schedual and now seemly can not do anything right and that is what the market is saying.Enought problems with world finanances and some German being banned from trying to sell his shorts without our now inability to drill a well where in the past we had no problems.
So Chris Roberts if you are there can you explain what this means.Will this well get drilled?Is it just a hold up or is it likely that TUI-2 will have to be abandoned as not drillable?
Digger, as the statements yesterday by AWE, NZOG and PPP stated, there are unstable shallow sediments, which have made the running of casing in the upper section of the well difficult. This has caused some delays and a change to the drilling plan. Not ideal certainly, but such things happen. 9 5/8" casing will be run to 1500m before drilling ahead to the target in an 8 1/2" hole. The target Kapuni F10 sand is at approximately 3,600m. There will be another drilling report next week which will give progress.
Bloody hell, I was looking to NZO to save Pike, now I'm starting to think, maybe Pike can save NZO
Pike not doing so well today either! Down 4.9% atm. Buy side looks very low, only 13,582 shares at average bid of jus under 94c.
Markets have tanked - that is probably the main cause - volumes behind the drops are tiny compared to normal..
NZO finished up 1 in Aus, after being deep in the red here and there most of the day. Finished at 113, with gap up to first sell of 118.
Does it mean anything?
Ever-(over?)-hopeful Lion
Lion,
Good call. Probably nothing in it but it is cause for optimism and on days like today we need something to cheer us.
AWE also a solid rise during the day. I have only got a few but I am praying for all holders that NZO hits that beautiful fluid. They need a bit of luck but in this game nothing is easy.
Meanwhile the non-producing coalmine that NZO owns (30% of) finishes 2 cents up for the day.
NZO has $200 million cash in the bank and a stake in 2 producing oil fields.
Go figure.
Corporate could you show how you have arrived at this figure-just to let us see precisely where our money has gone .Do you have a value of cash plus investments in equities and bonds ?
At 31 march 2010 the cash balance was the equivalent of $192.5m
They have earned more us dollars in the 8 weeks since-from Tui and Kupe plus some interest .
Nz dollar has recently fallen increasing the worth of this cash flow plus us dollar saving
They have converted prc rights and issued bonds and paid for a bit of drilling.
Yes, well if you can't spell rough you probably can't calculate a cash balance.
I just don't get it - you negative guys, just what do hope to achieve by running the company down?? Mere down-ramping so you can scoop up the shares cheaply? Oh, just run away and leave us honest posters to it please. Real comment is welcome, yes, but don't turn this forum into a ramping place like Hot Copper - it just de-values it so no-one will take any notice.
What about the cash income? That's a constant plus on the balance sheet.
The PRC money is an investment, it should count as a plus on the balance sheet.
This is a great company with major potential - OK, it may not achieve greatness, depending on world market fluctuations beyond our control, but please don't pluck figures out of the air saying it's going down the tubes - it just ain't necessarily so.
Let me get this right. Down-ramping (so called) is frowned upon, but personal attacks are OK?
The NZO's thread needs some balance. I only pointed out misleading information regarding the cash balance. And earlier on potential valuation risks.
This is absurd. My "plucking figures out of the air" is a far more realistic view of NZO's cash position than $198m.Quote:
....but please don't pluck figures out of the air saying it's going down the tubes - it just ain't necessarily so.
I certainly didn't say anything about NZO going down the tubes. That was you not me.
Let's wait and see what NZO's cash position actually is, before attacking each other, eh>
LOL:eek2: more like a big pile of "your" money into a dark black pit called Pike.
nzog has done a great job of brain washing its investors into thinking they are onto a winner. Oh it is a winner of holding in there, but that is about it.
Is this company going to get involved in any new projects? I see ROC has entered NZ in two permits in Taranaki and why aren't nzog in a joint partnership with them?
Time nzog walked the walk instead of the lame stories about doing stuff when all they have managed is to blow a lot of shareholders investment.
Please don't misquote me out of context. Everything posted above is FACT. I compared what I initially pointed out (as risks), to what actually eventuate.
Who attached who? Why wait for the next quarterly. Make an educated guess on the cash position - all the information is available.
My "sharetrader tone indicator" is firing full on buy signals. Whenever this thread becomes negative seeing the glass as 1/3 full of water (in the middle of a drill too) it is a contrarian signal that tells me without a doubt that now is good time to buy!!
discl hold nzo
The opposite of course also applies - I was worried when Hoki was potentially containing billions of barrels ( the glass was definately 2/3 full of oil)
dsurf, you are showing signs of "very wet day syndrome"...far too much time in front of the computer.
This can lead to rash buying and/or selling decisions, good side of things is, your duckpond will be full and drilling is (hopefully) continuing towards the elixir of Mexican Gulf !
Corporate .... you have started on a run on the NZO shares as they fall to 52 week lows
Being (badly) outperformed by the NZX over 1 year and 6 months is not a good look either
All your fault mate .... don't do it again
Damn you Corporate!!!!
I wouldn't be surprised if he's behind the european debt crisis as well.....
nzo shud go pick up those oil thats gushing from BP's well from the US :D , theres oil there for sure
Nothing surer: if oil's gushing from a well, you can bet there's oil there.
There's always Kahu!!
Total depth now at 1573m... only 2152m to go....
Wow, 66 metres in a week!!! That's excellent progress when you're drilling with a toothpick!!! By Xmas it'll be almost at the target depth!!!
What's the bet shifty sediments or a graben will scupper this drill.....
I heard the real reason that TEL has network problems is due to grabens
Grabens (also known as 'Garbons' by some) are also a suspected cause of the european debt crisis, as are shifty sediments.
Shouldn't that be the price of oil?
Fish have nothing to do with this, although they do swim in the area where the drilling rig is located.
They did manage to drill 66 additional metres while casing and cementing - a stunning feat in itself.
Is this correct?
I don't know much geology but the "unconsolidated formation" that stopped SW-1 sounds quite similar to a graben to me.
You'd think they would stop the drill now if they thought the difficult rock formation was going to stop them later. And they know a lot about what's down there now, (at least 35m away).
As a pre-eminent geologist, I'd say 35 miles is probably enough distance to avoid this unconsolidated formation. Any less than that and I'd be worried. If they'd only moved a km or so, there might be serious problems, but 35 miles is fine.
Oh 9 fingered one, you are in good form today!
Sometimes I can't tell if you are being serious, sarcastic or just joking.
So, joking aside, did you know they only moved 35 metres between Tui SW1 and SW2?
But yes, I'm sure you are correct that a graben caused the European debt crisis, and swine flu too, did you know that?
35 metres???? Oh my god!!!!! Oh god, no....noooooooooo, oh say it isn't true.....35 metres???? Awwww geeez, awwww fudge......in the name of all that's sacred and holy......35 metres??????
I was talking to a guy in the know about this and they were "trying something out" on the 1st hole.
they were trying to water blast the casing in through the sediment until it got to the rock, it didn't work
so had to shift it a little.
This is an old mate of mine. I just hope i've transfered the info correctly!
Certainly sounds possible.
Anyway now the casing is completed past the unstable sedimentary rock the drill should progress rapidly-hopefully just a few days .
We are building a new house and I have been coerced into promising not too buy anymore after my last recent foray at 145 .A friend of mine has been buying at bargain prices in the last few days -IMHO he should do well
Temuk
I think you can safely say that your old mate does not know what he is talking about.
These guys have drilled numerous successful wells out here. Why would they "try something out"
It is just not done. Any comments Chris?
Cheers
Pipe
Please don't expect me to comment everytime someone says something silly on here - (there are not enough hours in the day) but waterblasting? Really? Someone is taking the mickey.
Standard drilling procedures are being used at Tui SW. Sure, it hasn't been a straight forward drill, but when you are drilling 2 miles into the sea bed there's a good chance you will face a few issues along the way. The key thing is what we find when we get to the target area. The next drilling report is likely to be released Thursday next week.
Yup - a graben is just a big block of rock - down thrust by two faults which bound it on each side - - if you were drilling into one you wouldn't notice a thing unless you happened to follow one of the faults down - then it all depends on the rock type. In my home town - Wellington, we are unlucky to have a harbour full of horsts (up ones) and grabens (down ones) and then to also have greywacke - which breaks up into real unstable stuff near faults - and then people build houses on them.
(edit) - Whoops - claification: A graben is NOT unconsolidated rock. The fact that 'it' is a graben has no bearing on rock density, hardness or even type. It's just a macro feature.
Hurricane Season looking Bad but good for oil price.
Oil and natural gas prices surged on Thursday as the US government said this year’s hurricane season could rank among the most active to date, comparable to years that brought such devastating storms as 2005’s Katrina and Rita.
The outlook raises the possibility of damage to homes and businesses, losses to insurance companies and wild commodity price swings. It could also complicate BP’s efforts in the US Gulf of Mexico to contain its leaking well.
08The US National Oceanic and Atmospheric Administration estimated the June 1-November 30 season was likely to bring 14-23 named storms, with eight to 14 strengthening to hurricanes. “If the 2010 activity reaches the upper end of our predicted ranges, it will be one of the most active seasons on record,” the agency said. This is in stark contrast to last year, the quietest in 12 years.
Hurricanes wield significant influence in commodity markets, triggering wild price moves. Katrina and Rita forced shutdowns of natural gas and oil production and refinery activity along the Gulf coast, sending energy prices sharply higher. Charley, Frances and Jeanne in 2004 and Wilma in 2005 inflicted lasting damage to Florida’s citrus industry, helping push orange juice futures to a record high.
David Streit, meteorologist with Commodity Weather Group, said: “Any time you have an active season, it’s going to make for active markets.”
West Texas Intermediate, the US oil benchmark, rose to $74.4 a barrel, up nearly 4 per cent on the day, and recovering sharply from two weeks of falls. Oil futures for September, the traditional peak of the hurricane season, surged even higher.
NOAA cited a current potent recipe for hurricanes: record warm sea surface temperatures, potentially neutral conditions for El Niņo, the weather-altering Pacific warming, and a combination of a wetter West Africa and a drier Amazon.
Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.
And this is tipped to push up oil prices as well......
Barack Obama orders six-month freeze on offshore drilling and expansion
Barack Obama reversed a planned expansion of offshore drilling today, admitting he had been wrong to believe that oil companies were prepared to deal with a catastrophic oil spill.
He told a White House press conference he was ordering a six-month freeze on the opening up of the remote waters of the Arctic to oil exploration and on the drilling of 33 deepwater wells in the Gulf of Mexico. Proposed lease sales off the coast of Virginia and in the western Gulf would also be cancelled.
The US president said he was calling the pause to plans by Royal Dutch Shell to begin drilling exploratory wells in the Chukchi and Beaufort seas, after studying an interior department review of the Deepwater Horizon disaster.
He acknowledged that the enormity of the Gulf oil spill had forced a change in his earlier thinking that offshore drilling was safe and should remain a vital part of America's energy mix. "Where I was wrong was in my belief that the oil companies had their act together when it came to worst-case scenarios," he said. "It just takes one to have a wake-up call."
The announcement represents a retreat from Obama's proposal last March to expand offshore oil drilling. It was overshadowed in part by the president's moves to assert his command over the oil spill and appease critics who say his government has yielded to BP too much authority over plans to plug the well and clean up the environmental damage.
The president, who said repeatedly he remained in command of the disaster, also defended that earlier decision. He acknowledged he had underestimated the scale of corruption and dysfunction in the government agency charged with oversight of the offshore oil industry, the Minerals Management Service. "There has been a scandalously close relationship between oil companies and the agency that regulates them," Obama said.
His administration had started cleaning up the agency, notorious for sex and drug parties in the George Bush era. But "the culture had not fully changed at MMS. And I take responsibility for that," he said.
"We have to make sure if we are going forward with domestic oil production that the federal agency overseeings its safety and security is operating at the highest level."
The six-month halt in drilling falls short of the outright ban sought by Democratic members of Congress on the Atlantic and Pacific coasts and by environmental organisations. Conservationists said they hoped the review of environmental and safety regulations also discussed by Obama would lead to better protection, especially for the Arctic.
"The greatest risk had been the exploratory wells that Shell wanted to move forward with up in the Arctic, so we are particularly pleased the administration is putting forward a time-out," said Jeremy Symons, senior vice-president of the National Wildlife Federation. "It should give time to assess and learn the lessons from this in terms of drilling anywhere else."
Obama said he was basing his decision on the safety review conducted by the interior secretary, Ken Salazar.
The administration also imposed tougher safety standards on drilling rigs, ordering more rigorous testing of blow-out preventers and procedures for well control; both were seen as critical failures in the lead-up to the explosion.
The administration announced the exit of Elizabeth Birnbaum, the head of MMS. But the high-profile sacking is unlikely to satisfy calls for sweeping reform of an agency that has had overly close ties with the oil industry.
"She has only been the public face of MMS for 10 months," said Nick Rahall, who heads the house committee on natural resources which is investigating the oil disaster. "It must not be the end game of our efforts to get at the root cause of the problems in the MMS."
Obama is facing calls from conservationists to sack other senior MMS officials, including Sylvia Baca, who was appointed to the agency last June after being employed for more than eight years by BP in senior management positions.
both nzo and awe share price dropped....bad news at the well
So they had some repairs to carry out, dont know what that was. I bet the blow out valves are being very carefully installed !!
NZO
03/06/2010
MINE
REL: 1203 HRS New Zealand Oil and Gas Limited
MINE: NZO: Tui SW-2 Exploration Well Disclosure Notice
3 June 2010
New Zealand Oil & Gas Limited (NZOG) advises that at 0600 hours today, the
Tui SW-2 well was preparing to run the BOP's (Blow Out Preventers). This has
been delayed because necessary repairs were held up by bad weather over the
last week. After the BOP's are operational, the forward plan is to drill
ahead in 8-1/2" hole from 1,573 metres to a total depth of 3,725 metres.
The Tui SW prospect is located in mining licence PMP 38158 in the offshore
Taranaki Basin and is adjacent to the producing Tui oilfield.
At the conclusion of drilling, Tui SW-2 will be cased and suspended as a
possible future gas injection well.
Kahu-1, to the east of the Tui oilfield, will be drilled immediately
following Tui SW-2.
There is a sudden world wide interest in Blow Out Preventers.For the next 5 or so years safety will be paramount.After that the rot will slowly sink in and the world will go on another round of gradual slacking for another 5 or 6 years and then another blowout.The only thing we learn from history is that we learn nothing from history,so every 10 years or so we have to relearn the same thing.
This is the first NZO report were i have heard of a delay for the installation of the blow out preventer.
SP up 3 cents today, aye Notie. Good news from the well, aye Notie.
This is the first NZO report were i have heard of a delay for the installation of the blow out prevent-er.[/QUOTE]
This drilling crew has an appalling maintenance and breakdown record, but they may have a lot experience in picking the symptoms of possible Gusher.
Hence the precaution, lets be positive against all odds.
CHEERS
Any sign of a drilling report? It's Friday and all.
Oh yeah. The blow-off protectors or summit.
I'm waiting for an observation from Notie, NOG and AWE both up today, why could that possibly be ??
Oil is $74 USD again, but the NZD has fallen from 72c to 66c over the last month. Good for NZO returns, but wait for the pump price to start rising. Add in some more GST, and ETS, and we should have $2 a litre later this year.
Sptnz, I have a small bottle of Tui oil, about 100ml, are you interested ? Just kidding, I could never sell it. You could ask NZOG if they have any left, they gave them away at the last agm.
oil oil oil
NZO advises that TUI SW-2 has encountered hydrocarbons in the target sands.
Wireline logging over the next few days...
yipee - buy buy buy
Have a look at the buy prices on AWE, they like it !!!
Where's Notie? Bad news from the well, aye Notie?
there was actually ample opportunity to buy and make quick profit following the posts on this thread
Well done NZOG. Oil in the target sands.
Blockie got in for a small helping @ $1.38
I guess we should acknowledge there were no leaks pre ann, we are never slow to point the digits when the price moves before such an ann
so they have oil shows............
but the well will be plugged and used for gas injection in the future...........
so if there is lots of oil....... i guess they will pump it first?
why use this well for gas injection when they could inject into the tui well?
Love it, this lifts the value of NZO's exposure to PPP also. Hopefully international oil prices keep bouncing off their lows and we can see the uptrend in NZO start resuming.
If Kahu - 1 comes up with the goods we could see some serious action.
[QUOTE=neopoleII;307500]so they have oil shows............
but the well will be plugged and used for gas injection in the future...........
so if there is lots of oil....... i guess they will pump it first?
Excellent news and a very long time in coming. Somewhat expected as is apprasal and sure would be bad news if TUI SW-2 were dry.
Neopole exploration wells are not production wells.Note inTUI new production wells were drilled.The sizes are different and production wells now days are horzontally drilled. This will likely come later when needed. First we have to wait those few days for results to see how good it all is.
Bet NZO managment are as releaved as i am that hydrocarbons were found even if somewhat expected.
They now need to put pressure on PRC management to deliver and you will have NZO sp heading north.
Apologies for the obvious question, I'm very much a newcomer to following this whole oil exploration thing, but at this stage how significant a result is this?
Obviously presence of hydrocarbons is always going to be better than no presence. Would I be correct in my understanding though that at this stage this is simply an indication that there's something there that may or may not be commercially viable, making it a good result so far but certainly not yet a guaranteed success?
This result is not unexpected as this is an appraisal well. Pre-drill AWE were saying this would add another 5 million barrels oil.
It was always likely that this well would be successful in finding oil. The next well is much more risky but if it does find oil then it is a significant discovery as it potential means the oil extends much further east than previously though. if it is dry then it means the tui field isn't going to get much bigger.
as I have said before, the problem with nzo is they don't have any decent near term exploration projects on their books so if you own shares in them you are relaying on decisions made by companies like awe who operate most of the areas nzo are in.
Wireline logs will almost certainly confirm a ten metre Oil Column, which was the same as discovered at Tui
Amokura had a 12 metre column and Pateke was 13 metres.
But how many million barrels is the question, and I can't recall how they determine this.
The positives are that it should be developed quickly, and if it is anything like the other three the flow rate will be good. :D
And well done NZO for choosing AWE - I personally don't mind at all another 625K barrels (assuming 5 mill added to reserves) at $US 74 / .66 = NZ$ 70 mill gross less say $20 barrel costs (floating tanker 10 + 10 for drilling & hookup) = 12.5 mill giving approx NZ$ 57.5 mill extra.
Good work AWE
Pre-drill AWE were saying this would add another 5 million barrels oil.
all that hassle they would have been better off to go to florida with a container ship,a few hundred kiwis on the dole,and a heap of garden hose from mitre 10 for siphoning
I agree, why gripe about who NZO are partnered with....things are looking good on this drill with Kahu up the sleeve. I don't see anything but positives over the last few months, Pikes so close now you almost taste it, Kupes on full stream, Kaupokonui shapes as an excellent prospect for the future. The only thing holding the SP back is the global economic situation, and that is subject to change.
That's correct, but because we have the basic infrastructure in place, even a small find will be commercially viable. This is fairly positive news and indicates a likely increase in the recoverable potential of Tui, the shows will be an extension of the Tui field not a new one. If it were an isolated well, there would be much more doubt as a small find might not justify the development costs.
Notie,the watch naturally refers to keep an eye on how fast you will pull your comments when it does not turn out as you are now asserting.NZO will do careful due dilengence on the worth of drilling or otherwise and it will have nothing to do with your emotive position you are trying to display with the ''Too scared'' stuff. It will also depend on the next well or possible next two near TUI,as success here will undrpin the cash flow during these possible drills.
I am far from an expert on the Ausi tax treatment of reserves, however my understanding is that there is a -ve effect on NPAT / EBIT when reserves are announced as the government allocates tax on future royalties or something similar. Would appreciate any accountants who know more.
However this means that reserves will likely always be understated in the Ausi tax jurisdiction & that any reserves upgrade which seems inevitable will occur very early in the new year. So I expect the real news about this drill is that the already understated reserves ( check out the life of field (recoverable reserves estimates versus actual production & a clear trend of deliberate understatement is obvious) will be far more after this drill. Expect a reserves upgrade Q1 for AWE ie Jul - Sep. I also suspect the 5m estimate can probaly be doubled.
iNTERESTING, i had thought that tax policy only applied to AUS companies in AUS. If correct the way you are putting it then why even lift reserves next year. Why not wait until after it has been produced and then claim it a bit of suprise that it was there.That way you do not have to pay the tax until you have earned the money.
I didn't see anyone being too scared to drill Hoki or Albacore. Paydirt wasn't struck on those particular drills but it only takes one strike to transform a company's whole outlook. Obviously they will farm-in partners for Kaupokonui, it's pretty standard for the oil biz. If other companies don't like the look of the data on the leads, they won't participate, but obviously they have done in the past and I see no reason why they wouldn't continue to work with NZO.
There's always a big risk associated with drilling these leads but the pay-offs can be huge too.
AWE - the operator & therefore in charge of everything including releases & estimates etc is domiciled in AUS. They will have to lift reserves when basicly there is no choice eg doing development drilling or when production profile is way above "initial estimates" so as not to attract undue IRD interest. Also the market & SP etc likes additional reserves so there is a continual balancing act.
I AM NOT AN ACCOUNTANT but as I understand it, when reserves are recognized, the liability to pay royalties is immediately written into the accounts, although the royalties are not paid to the crown until the oil is actually produced. This has an immediate negative effect on paper earnings, but not on cash flow, and in fact may result in deferred payment of tax. There is no real incentive to under-declare reserves.