AWE starts drilling Oi-1 offshore Taranaki, New Zealand

Offshore staff

SYDNEY, AustraliaAWE Ltd. (ASX: AWE), as operator of Petroleum Mining Permit 38158 offshore Taranaki, New Zealand, advises that the semisubmersible drilling rig Kan Tan IV began drilling the Oi-1 exploration well on May 30. The Oi-1 exploration well is 12 km (7 mi) northeast of the Tui oil fields in 120 m (394 ft) of water.

Operations ran and cemented 30-in. casing to 229 m (751 ft) and was drilling ahead in a 17½-in. hole at a depth of 510 m (1,673 ft).

The Oi-1 exploration well will be drilled vertically to a planned TD of 3,881 m (12,734 ft). The objective is to evaluate the hydrocarbon potential of a four-way dip closed structure similar to the producing Tui, Amokura and Pateke fields, and it will target the same F10 reservoir sandstones.

The Oi prospect represents a best estimate prospective resource of 11 MMbbl recoverable oil (gross, unrisked P50 estimate). AWE is participating in the Oi-1 exploration well at a reduced equity of 31.25% and has the option to increase its equity participation in any future appraisal drilling and development to 57.5% by exercising existing buyback provisions.

Gross dry hole drilling costs are estimated at $27 million, and the well is expected to take 30 days to complete. In the event of a commercial discovery, subsequent development could tieback to the nearby Tui production facility, the FPSO Umuroa, where sufficient production capacity is available.

The joint venture partners in PMP 38158 are operator AWE Ltd. (via subsidiaries), 57.50%; New Zealand Oil & Gas (via subsidiaries), 27.50%; Pan Pacific Petroleum (via subsidiaries), 15.00%.

The Joint Venture partners in the Oi-1 exploration well are operator AWE Ltd. (via subsidiaries), 31.25%; New Zealand Oil & Gas (via subsidiaries), 18.75%; and Pan Pacific Petroleum (via subsidiaries), 50.00%.

06/02/2014

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