New Zealand Oil and Gas has reported a decrease in production from the Tui oilfield in its latest quarterly report
New Zealand Oil and Gas has reported a decrease in production from the Tui oilfield in its latest quarterly report, while announcing an investment in an offshore drilling project in the Canterbury Basin.
Total production from the Tui field in the three months to September 30 was 3.15 million barrels of oil at an average of 34,000 per day, down from 3.77 million barrels at 41,500 a day in the previous quarter.
Extreme weather at the start of July and maintenance work in September are blamed for the decline.
An increase in associated water is also limiting production but there are plans to increase production vessel Umuroa’s fluid handling capacity to 180,000 litres a day to compensate.
Although NZOG’s operating revenue from Tui was down slightly, to $72.3 million for the quarter, the company has a healthy balance sheet after paying off debt and investing in other projects.
One of these projects is the prospecting being done in the Canterbury Basin for oil and natural gas.
NZOG has bought a 40% stake in the project from Tap (New Zealand) Pty Ltd, a subsidiary of Australian company Tap Oil Limited.
David Salisbury, NZOG CEO, is positive about the prospect.
“We have concluded that the Canterbury Basin has proven effective petroleum systems present and the potential to produce commercial quantities of oil and gas.”
Mr Salisbury says the prospect has potential recoverable resources of 600 billion cubic feet of dry sales gas and 58 million barrels of light oil/condensate.
“However,” Mr Salisbury adds, “a lot of work remains to be done to assess the prospect, beginning with further seismic studies.
“There is no certainty that an exploration well will be drilled or that a commercial development will be the end result.”