PCL 0.00% 0.3¢ pancontinental oil & gas nl

Huinga - NZ$2 billion well

  1. 2,070 Posts.
    The market is somewhat reticent on good news at the moment but the Huinga 1B well is looking better and better and more commercial ever day. The stocks are rising but still cheap and the price of oil is relatively strong and stable. Last year this kind of news would see a big run on the stocks.

    From the local NZ print media:

    Promising find in new oil field
    17 JULY 2002

    SYDNEY: A multi-national energy exploration project in Taranaki has made further positive inroads into a new deep onshore well which has the potential to reap millions of barrels of oil.

    Extensive testing will be carried out in the Huinga-1B field but indications are the 4500m-deep well in central Taranaki could potentially match the output from the established Waihapa field due east of the new project.

    Waihapa, among a series of fields developed in the 1970s and 1980s, has yielded more than 27 million barrels of oil and gas, worth about $NZ1.6 billion, at present high crude oil prices.

    A rich vein of oil has been detected between a depth of 4360m and 4500m in Huinga-1B. Drilling started in May.

    Perth-based Pancontinental Oil and Gas, one of eight companies involved in the joint venture, said the discovery justified the $12 million already invested in sinking the well.

    "We wouldn't be throwing more money at it if we weren't confident there was something there," Pancontinental chief executive Andrew Svalbe said.

    "We believe it's commercially significant, we have a high degree of confidence we have significant oil reserves."

    A series of drill stem and production tests are scheduled over the next month as the exploration team seek a clearer indication of how plentiful the resource is.

    The initial drill stem test across a section of Kapuni sandstone in the lower reservoir recovered more than 20 barrels of oil last weekend.

    "That confirms our belief the Kapuni sands has moveable oil in it. The next step is to see if oil flows at commercial rates.

    "The long-term production testing we're conducting now will collect flow and pressure information and help establish the help extent of the reserves," Mr Svalbe said.

    Huinga-1B is due north of the Rimu field, the most significant recent discovery in the basin.

    Mr Svalbe said the Huinga-1B could play a crucial role in the future of New Zealand home-grown energy industry considering the decline of the large Maui field.
 
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