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Pateke well hits another snag

Thursday 21st October 2010

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New Zealand Oil & Gas today said that production at the Pateke 3H well, situated offshore on the Tui oil field, has been delayed again after due to technical issues.

The cost of the initial repairs was estimated at $46 million, of which NZOG’s share was $5.75 million. Costs are likely to climb further to clear constraints within the production flow path. The news comes just 10 days after the energy exploration company announced resumption of production at the well, which was shutdown in June due to problems with its artificial lift system.

“The initial problem with the well was fixed, and it does seem clear repairs were successfully completed,” NZOG spokesperson Chris Roberts told BusinessDesk.

“This is a new issue, and perhaps a consequence of the well having been non–operational for a number of months. We don’t know what it is exactly at this stage, and we are trying to narrow down the potential issues over the next few days.”

The delay adds to several problems on the Tui field so far this year, with two exploration wells failing to find significant evidence of hydrocarbons.

“We do seem to have had some back luck of late, but we can’t forget how much benefit Tui has provided,” Roberts said.

“It has already produced 29 million barrels versus the initial total reserve estimates of 27 million barrels.”

NZOG is the only New Zealand participant in the Tui oilfield, with a 12.5% stake. AWE, the field operator, has 42.5% stake, Mitsui E&P Australian 35%, and Pan Pacific Petroleum has 10%.

It estimates that once clear, the Pateke well will produce 3,000 barrels of oil per day at full production.

Shares rose 0.8% to $1.27, and have declined 23% in value so far this year.

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