Tui partners targeting bypassed Pateke North, PPP says

BUSINESSDESK: The Tui oilfield partners are considering drilling a new production well in the Pateke North lobe structure, which has so far not been penetrated, 10% Tui shareholder Pan Pacific Petroleum says.

In comments in the company's annual report, chief executive Tom Prudence says the Pateke North well may offer between one million and four million additional barrels of oil, with drilling likely in mid to late 2013, subject to rig availability.

The Tui field has so far produced a total of 33.2 million barrels of oil, with a net 7.3 million barrels remaining in existing identified reserves.

PPP's share of production in the year to June 30 was 220,543 barrels and was the company's sole source of oil income for the year of $A26.0 million, up from $A24.1 million the year before.

Also in prospect are two exploration wells in the Tui licence area, named Oil and Matata.

"The company consider the Oil prospect to be particularly attractive with prospective resources of 10 million to 15 million barrels gross," Mr Prudence says.

After $A15.6 million of production costs and other expenses including $A3.7 million in royalties to the New Zealand government, the company declared a net profit after tax for the year of $A2.7 million.

Favourable exchange rate movements added a further $A4.3 million, to deliver total comprehensive income of $A7 million for the year.

With $A101.2 million in cash or equivalent in the bank, the dual-listed company made interest income of $A2.6 million, and is almost ready to proceed with a capital return to shareholders of 5 Australian cents per share, following recent receipt of a draft ruling on tax treatment from the Australian Tax Office.

Meanwhile, PPP is close to committing to four exploration wells in its Vietnamese prospects, one of which depends on a farm-in with Origin Energy.

But it has put its interests in the Western Australian offshore Carnarvon Basin on the market, saying they are "no longer a natural fit with the company's strategy to focus on high-growth opportunities".

The partners in the Bazartete block in the Timor Sea, jointly administered by Timor-Leste and Australia, are contemplating a well in the fourth quarter of this year, subject to rig availability.

The operator, Oilex, estimates mean recoverable reserves from the prospect of 65 million barrels of oil, and up to 164 million barrels.