Australian energy firm AWE has started drilling at the Oi-1 exploration well in petroleum mining permit 38158, offshore Taranaki, New Zealand.
The Oi-1 exploration well, which is located approximately 12km north-east of the Tui area oil fields in water depths of around 120m, will be drilled vertically to a planned total depth of 3,881m.
The company intends to identify the hydrocarbon potential of a four-way dip closed structure similar to the producing Tui, Amokura and Pateke fields, in order to target the similar F10 reservoir sandstones.
AWE said the Oi prospect, in a discovery success case, represents a best estimate prospective resource of 11 million barrels of recoverable oil.
The company is participating in the Oi-1 exploration well at a reduced equity of 31.25% and has the option to increase its interest in any future appraisal drilling and development to 57.5% by exercising the current buyback provisions.
Drilling at the well is anticipated to take approximately 30 days to complete and gross dry hole costs are estimated at $27m.
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By GlobalDataAWE’s joint-venture (JV) partners in the Oi-1 exploration well are Pan Pacific Petroleum with 50% stake and New Zealand Oil & Gas with 18.75% stake.
Pan Pacific said if Oi-1 is successful, the JV partners will consider drilling a sidetrack at non-sole risk participation levels to provide further data that may assist with determination of resources and development planning.
It is expected that a commercial discovery would later be tied back to the Tui production facility, the FPSO Umuroa.
Image: The Oi-1 exploration well is located approximately 12km north-east of the Tui area oil fields in water depths of around 120m. Photo: courtesy of AWE.