By Neil Ritchie

WHILE offshore exploration and development activity in New Zealand is down from the unprecedented high of last summer, 2015 is still looking bright.

A year ago the Noble Bob Douglas deepwater drillship, the Archer Emerald modular offshore drilling unit (MODU) and semi-submersible Kan Tan IV were already drilling, while Taranaki waited for the imminent arrival of the jack-up Ensco rig 107.

Now the Noble Bob Douglas is long gone, the Kan Tan IV is set to depart New Zealand waters in early 2015. and the Archer Emerald left in mid-December aboard the Thorco Arctic, believed to be bound for Scotland.

However, the Ensco rig is still involved in the extensive development program of the offshore Taranaki Maari-Manaia oilfield and may be here until the end of 2015, perhaps even early 2016.

2014 saw US major Anadarko Petroleum withdraw from the sole Deepwater Taranaki basin licence and drilling troubles for the Kan Tan IV in the Maui gas field.

While pulling out from exploration licence PEP 38451 alongside minority partner Discover Exploration, Anadarko will remain involved in New Zealand.

The company remains committed to its other offshore New Zealand leases – the Canterbury PEP 38264 licence that it holds with Aussie listed major Origin Energy and the two offshore Pegasus basin licences, which Anadarko controls 100 per cent.

Anadarko, Discover Exploration and Hyundai Hysco, together with US private company Global Resource Holdings and its founding director Randall Thompson drilled the US$100 million-plus Romney-1 wildcat well in early 2014.

There are also unconfirmed rumours that Randall Thompson’s company and Hyundai Hysco are intent on keeping the PEP 38451 lease, with Mr Thompson buying out Anadarko and Discover for some undisclosed sums, together with planning to shoot more 2D seismic this summer over the Merino trend in the southwestern part of the licence along the Challenger Plateau.

In onshore Taranaki, various players continue their largely successful exploration and development campaigns.

Among them are the Canadian listed juniors TAG Oil and New Zealand Energy Corporation.

TAG is continuing its largely successful campaigns at its onshore Taranaki Cheal, Sidewinder and Cardiff fields, recently achieving record operating revenues of C$16.2 million for the September 2014 quarter, up from C$15.5 million the previous quarter.

It has now recorded four consecutive quarters of increased revenues, generating net income of C$5.1 million during the quarter and C$8.8 million for the six months.

It is also managing to maintain its consistent production growth. The company’s production averaged 1,845 barrels of oil equivalent per day (boepd) with 78% being oil during the latest quarter. And production crept up to 1,990 boepd (76% being oil) during October.

Now TAG is pursuing a number of avenues to grow its already high production netbacks even further. Operating netback for the first six months of the 2014-2015 financial year increased by 28% – from C$54.14 per boe during the preceding fiscal year to C$69.25 per boe over the same period during the 2013-2014 fiscal year.

Things are starting to look up for NZEC, with its operating netback also improving – from C$58.90 per boe during the September 2013 quarter to C$71.04 per boe for the September 2014 quarter. Its production also increasing – from 11, 958 barrels for the September 2013 quarter to 18,689 barrels for the September 2014 quarter.

However, it now has less than C$1.3 million of working capital, perhaps enough to last it only a few months, together with drawing on some of its NZ$5 million short-term loan from Geoff Loudon, the chairman of NZEC’s partner L&M Energy.

NZEC has also closed its former head office in Vancouver, British Columbia, with the loss of several jobs, and is now concentrating its administration and operational headquarters on New Plymouth.

But throughout the year, these negatives were far outweighed by the positives, which include at least three if not four seismic survey programs extending the length of the country, coupled with the most successful yet petroleum blocks offer.

Maari-Manaia, this country’s largest oilfield, has also gained a new lease of life, with first “new oil” now flowing from its extensive €205 million development drilling campaign.

The new producing well, MR 8A, started flowing during late November from a previously un-drained part of the field’s Moki Formation. It is expected to produce up to 4,500 barrels per day (bpd) of oil, with Maari and Manaia producing about 10,000 bpd earlier this year.

The success on well MR-8A success and anticipated successes from other wells yet to be drilled, should revitalise the field’s future for operator Austrian giant OMV and its partners – Todd Energy and listed Aussie juniors Horizon Oil and Cue Energy Resources.

The Ensco rig is drilling new five wells into existing and new reservoirs, plus several water injection wells, and its Maari campaign is not expected to be finished until mid-2015. The rig earlier drilled into the previously untapped deeper Mangahewa formation but that well has been suspended, pending the development of a revised well completion plan.

Earlier this year Tui oilfield operator AWE and its partners New Zealand Oil & Gas and listed Aussie junior Pan Pacific Petroleum drilled the successful Pateke 4H well during early 2014 and discovered at least 2.5 million additional barrels of recoverable crude oil to go with existing production from the Tui, Amokura and Pateke oil pools that make up the Tui Area field.

Plans are well underway to link the latest Pateke horizontal well into existing production facilities, principally the floating production, storage and offloading (FPSO) vessel Umuroa by the second quarter of 2015.

The Maui gas field partners Shell Exploration NZ, Todd Energy and Austrian firm OMV also completed a largely successful campaign of drilling several sidetrack wells from the Maui A platform, targeting previously bypassed pools of gas.

However, the Maui partners have since had many operational drilling problems during the Ruru campaign carried out in the southeastern corner of the field. Firstly, mechanical issues with the casing or material lining of the original Ruru 2 led to a sidetrack, Ruru 2A, then further problems with the sidetrack led to the plugging and abandonment of that well.

The Kan Tan rig then moved a short distance away and spudded Ruru 3 during late October and there are now rumours the second planned well, Maui 8, due to be drilled near the centre of the twin-lobed field may not go ahead due to costs doubling to about NZ$120 million for Ruru alone.

There are also several seismic surveys planned over the next few months for the Reinga basin, northwest of the North Island, offshore Taranaki and Canterbury, the Great South Basin and perhaps the Pegasus basin.