The Kupe oil and gas field off the Taranaki coast may produce a $100 million windfall for New Zealand Oil&Gas Ltd (NZOG) after its reserves were upgraded.NZOG said the field's proved and probable (2P) reserves have been increased following a review. T
The Kupe oil and gas field off the Taranaki coast may produce a $100 million windfall for New Zealand Oil&Gas Ltd (NZOG) after its reserves were upgraded.
NZOG said the field's proved and probable (2P) reserves have been increased following a review. The field lies 30km off the south Taranaki coast and has been producing natural gas, LPG and light oil since 2009.
The initial 2P sales gas reserves have increased by 8 percent, LPG reserves by 5 percent and light oil condensate reserves by 27 percent.
NZOG's share of the reserves increase is about three petajoules of gas, 8000 tonnes of LPG and 600,000 barrels of light oil.
"At current prices, the additional NZOG reserves have a sales value of nearly $100 million," chief executive David Salisbury said. He said this was very good news.
"The light oil provides the greatest financial return of the three products, so confirmation that the field is more 'liquids-rich' than initially estimated is particularly significant."
The reserves review has also clarified capital expenditure needs. NZOG said two additional production wells will be needed and its share will be $20m to $30m.
The project was developed for a total cost of around $1.3 billion.
The reserves review has integrated new petrophysical, fluid sample and well test information with full field static and dynamic reservoir models. As a result of this modelling, initial 2P reserves have been revised to 273 PJ of sales gas, 1114 kilotonnes of LPG and 18.6 million barrels of light oil.
Production since commissioning commenced on December 3 until June 30 has totalled 10 PJ of sales gas, 32 kilotonnes of LPG and around one million barrels of light oil.
The remaining 2P reserves at June 30 are therefore 263 PJ of sales gas, 1082 kilotonnes of LPG and 17.6 million barrels of light oil.
"Developing the Kupe field was a major undertaking but the rewards are significant. This reserves upgrade is more icing on the cake," Mr Salisbury said.
