By Oke Peter
An International oil giant, TAG OIL has announced updates on its operations in New Zealand and Australia.
According to the release, the firm’s Net production in New Zealand averaged approximately 1,110 boe/d over September, which is down slightly from the 1,169 boe/d (79% oil) average over the three months ended June 30, 2017.
The decline is the result of several factors, but is primarily due to the Cheal-A12 well being shut-in due to a pump failure and the waterflood response taking longer than expected to begin increasing production. Recent workover activity over the past week has restored approximately 140 boe/d and TAG expects to exit fiscal 2018 at March 31, 2018 with production of ~1,300 boe/d.
The decline in production has been partially offset by the recent rise in the price of Brent crude. Over September, the average price received by TAG was approximately US$58/bbl after taking in to account the quality differential that TAG receives for its oil.
TAG’s waterflood program is continuing, with water injection rates of ~2,000 bw/d at the Cheal permit (PMP 38156, 100% TAG) and ~900 bw/d at the Cheal East permit (PEP 54877, 70% TAG). There are very early indications of a pressure response and lower than forecast decline rates at the main Cheal permit field; however, based on additional modelling work and more accurate pressure data, current expectations are that a more definitive uplift of production and recovery factors will likely be seen by mid-2018.
On the exploration front, preparations are underway for the drilling of the Pukatea-1 exploration well (PEP 51135, 70% TAG). The well is tentatively scheduled to spud on January 31, 2018, which will be targeting the Tikorangi Limestone formation in a location up-dip and above the lowest known oil produced from the adjacent Waihapa field.