After five months of work drilling the three production wells for the $1bn Kupe gas/condensate project, the Ensco-107 jack-up rig is about to begin a 50-day, $50m drilling campaign of the Momoho prospect in the same permit as the Kupe wells. The Momoho exploration well location is about 5.5km from the Kupe production platform, 30km off Hawera in South Taranaki. The Momoho prospect sits between exploration well KS-4, which was a gas/light oil discovery, and KS-5, another discovery, which flowed mainly oil with some gas. NZ Oil and Gas, a 15% partner in the Kupe project, expects the Momoho prospect will contain a combination of gas and liquids. The P50 estimate of recoverable resources is 200 BCF on the assumption Momoho discovers hydrocarbons. In the event Momoho is a commercial discovery a development may be possible via the Kupe infrastructure.

NZ Oil and Gas says after completing operations on the Kupe South 7 Sidetrack, batch testing of the 3 production wells (KS6, KS-7 ST1, and KS-8) will be carried out. Once flow testing is finished, the wells will be closed in until the rest of the facilities are completed in mid-2009. They are expected to produce 254PJ of natural gas, 1.1m tonnes of LPG, and 14.7m barrels of light oil/condensate. Around two-thirds of the revenue will come from the liquids and NZ Oil and Gas reckons Kupe is a more attractive investment now than when the commitment to develop the project was taken 2 years ago. Higher oil and LPG prices are expected to more than offset the impact of increased capital costs experienced by the project.

NZ Oil and Gas, which is reaping a cash bonanza from its 12.5% share in the Tui oilfield, says production from Tui has now passed the 12.5m barrels mark, and looks certain to exceed the revised 13m target for the year. The partners had expected a significant decline in daily production from about February down to about 17,000 barrels a day, but the wells are still producing more than 40,000 barrels a day. Australian Worldwide Exploration, operator of the field, is carrying out an assessment on the field’s delivery performance, which has far exceeded the projections in modelling before the decision was taken to proceed with development.

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