1 May 2006

Turangi petroleum permit highlights ongoing potential of Taranaki

The Associate Minister of Energy, Harry Duynhoven, today said that the award of a permit to Greymouth Petroleum to produce oil and gas from the Turangi discovery confirmed that onshore Taranaki will continue to have a major role in New Zealand’s energy future.

"It is exciting to see a New Zealand owned and operated exploration and production company make a discovery of this kind which is significant in terms of its short term contribution to the country’s energy needs, and its medium term implications for ongoing exploration in onshore Taranaki," Mr Duynhoven said today.

The Petroleum Mining Permit (PMP 38161) is over a 28km2 area 25km northeast of New Plymouth and immediately onshore from the large Pohokura gas field due to come into production this year.

It was awarded in March 2004 as an exploration permit to Greymouth Petroleum on the basis that a well would be drilled within the first 12 months of the permit.

The Turangi field is part of the of the Kapuni Group (Mangahewa Formation) and, with estimated ultimate recoverable reserves (P50) of 4.8 million barrels of condensate and 144 PJ gas, it is the third largest onshore gas discovery in New Zealand history, behind the Kapuni and McKee fields.

"The discovery reinforces the geological prospectivity of Kapuni Group targets in the Taranaki Basin, and it demonstrates the importance of continuing exploration in onshore Taranaki to meet our short term energy needs," Mr Duynhoven said today.

"While offshore exploration for major fields remained critical to New Zealand’s long term energy needs, the Government also recognises the importance of smaller, but material, onshore developments.

"Turangi is a prime example of how quickly an onshore discovery in Taranaki can be brought into production.

"Discoveries of this kind have an enormously positive impact in providing New Zealand with more time for offshore exploration as well as for developing a wider range of sustainable energy alternatives," Mr Duynhoven said today.

The Minister has asked officials to prepare a paper on possible initiatives for hastening further exploration and production Government consideration to supplement the initiatives put in place in 2004.

Fact Sheet

Following the ‘2003 Taranaki Offshore and Onshore Petroleum Exploration Permit Bidding Round’ Greymouth Petroleum (and subsidiaries) were granted Petroleum Exploration Permit 38762 on the 8 March 2004. The permit was awarded on the condition of a well being drilled within 12 months.

The operator spudded Turangi-1 on 7 April and the well reached a depth of 4136m (AH) on 9 May 2005. Turangi-1 intersected 177m of gross pay of which 92m was classified as ‘proven’ by wireline Modular Dynamics Testing (MDT’s).
In December 2005 a 3m interval in the deepest zone planned for production was perforated and production tested. The interval tested at a flow rate of 1.6 mmscf/d at 1,800 psi FTHP (flowing top hole pressure). Condensate yield during the test averaged 38.2 bbls/mmscf with a condensate gravity of 42 deg API.

In January 2006 the same interval was hydraulically fractured and additional production testing conducted. Following fracture the interval tested at a flow rate of 9.7mmscf/d at 3275 psi FTHP. Condensate yield and gravity were similar to the pre-frac performance. A further two shallower zones have been subsequently hydraulically fractured and these are currently being cleaned up under test.

The Turangi Field reservoir is interpreted as being inter-bedded fluvial and estuarine sandstones with marine influenced and shore-face deposits increasing to the north-west of the field. Gas and condensate has been found in multiple zones. The insitu permeability of the Mangahewa Formation sands is less than 10mD. Porosities range from 7 to 100% and average gas saturations range from 55 to 75%.

A total of 75m of net pay in three key reservoir intervals is targeted for initial production from Turangi-1.

Volumetric reserve estimates have been restricted to the three zones targeted for first production and include all sands associated with these zones.

ENDS

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