By Neil Ritchie
THE TALE of contrasting Canadian juniors continues, with TAG Oil’s increasing production and revenue enabling it to consider further growth opportunities, while New Zealand Energy Corporation’s production is still insufficient to meet continued total operating costs.
TAG’s average net daily production increased by 18 per cent for the June quarter to 1,750 barrels of oil equivalent per day, with 74% being oil, from 1,486 boepd for the March quarter.
Total revenue increased by 11% for the June quarter from C$14 million to C$15.6 million. Operating netback per barrel of oil equivalent increased from C$71.89 to C$72.16 per boe and cashflow from C$1.7 million for the preceding quarter to C$7.2 million for the June quarter.
TAG said it was considering “a number of business growth opportunities” based on stabilised production trends and the number of development drilling prospects already identified.
One such opportunity may include contracting with additional drilling services required to expedite drilling operations, with a view to further growing shallow production from the onshore Taranaki Cheal and Sidewinder fields.
But for fellow Vancouver-headquartered NZEC, its total net production still hovers over 200 barrels of oil per day, with production from the company’s totally owned onshore Taranaki Copper Moki and Toko wells increasing slightly, with production from the Tariki, Waihapa and Ngaere licences jointly owned by NZEC and private partner L&M Energy declining.
“Third part revenue (from the Waihapa production station) is good but they are spending more on deferred maintenance than they are getting in revenue . . . it’s difficult and costs are killing them,” one commentator told Oil & Gas Australia recently.
“Without Copper Moki they would not still be around . . . they need increased production and to meet their new target of 300 boepd just to break even,” said a second.
Meanwhile, UK listed junior Kea Petroleum is, in conjunction with partner MEO Australia, plugging and abandoning the onshore Taranaki Puka-3 appraisal well.
Wireline logging encountered a thicker than expected Miocene-aged Mount Messenger reservoir section but the sands were predominantly water wet. An oil water contact was interpreted in the upper part of the sands, significantly shallower than prognosed but the quality of the sands above that contact was deemed not to be commercial.
The plugging and abandoning of Puka-3 is a blow to MEO which farmed-in recently and is now entitled to 30% of future Puka production and has up to six months to evaluate whether to proceed to the second phase of agreed work.
Finally, the first Chinese land rig imported into New Zealand has left the country after only two and a half years – principally because of insufficient onshore activity plus the arrival of more so-called cyber rigs.
Chuanqing Drilling Engineering Company New Zealand, a subsidiary of China National Petroleum Company, imported the rig through New Plymouth during February 2012, primarily for Kapuni operator Shell Todd Oil Services.
Rig 43 arrived disassembled at Port Taranaki and once reassembled and certified STOS used the rig at the onshore Taranaki Kapuni gas field to drill two deep Eocene-aged wells from the KA1-7 wellsite, as well as a workover of the KA-14 well. The aim of this extended program was to extend the life of the country’s oldest gas field that is now in its 46th year of production.
The rig was then stacked for months though TAG Oil did pick the rig up early this year to drill another deep Eocene-aged well, this time Cardiff-3, though that was suspended pending an on-going and the rig released.
Rig 43 left New Zealand as it arrived – disassembled and through Port Taranaki aboard the Fagelgracht vessel during mid-August bound for Port Xingang on the northeastern coast of China.