Further Progress in Pohokura Drilling Campaign

6 June 2000, New Plymouth – Fletcher Challenge Energy announced today it will undertake a drill stem testing programme of Pohokura –2 to further define the commercial viability of the discovery located offshore Taranaki.

At this stage two Drill Stem Tests (DST) are planned over the following intervals:
 DST1 3608 to 3635 metres (an interval moderate quality reservoir)
 DST2 3581.5 to 3588 metres (an interval of good quality reservoir)

Each drill stem test is anticipated to involve flow and pressure build-up periods over a period of 12 to 24 hours. Testing is scheduled to commence on Friday June 9 depending on the weather conditions.

The objectives of the test programme are twofold. Firstly, to calibrate the flow potential and gas recovery from a representative sample of the reservoir types found in the well. Secondly, to acquire gas samples in order to establish any gas compositional variation in the field. Although the interpretation of log and pressure data has confirmed a common gas water contact at 3618 metres sub-sea in Pohokura 1 and 2 there is the potential within the large gas column for compositional segregation.

The results achieved to date at Pohokura suggest that the reservoir is of higher quality than pre-drill expectations. If confirmed by test data, then it is probable that reserves in the field will exceed the pre-drill mean expectation of 430 BCF.

Drilling and logging of Pohokura-2 has taken five weeks as planned with the well reaching a total depth of 3800 metres. At this stage it is likely that the ENSCO 50 rig will be released following the completion of Pohokura-2.

Following the Pohokura-2 well test programme the PEP 38459 Joint Venture will consider further appraisal options. These options include the acquisition of a 3D seismic survey over the field and the possible need for a well to test the southern extent of the field in a location close to the coastline. If required this activity is likely to proceed in late 2000 to early 2001.

Once the appraisal programme is successfully completed, consideration will be given to the range of options that could be assessed for field development. Development planning would be run in parallel with gas marketing initiatives.

There has already been plenty of interest in Pohokura gas with potential customers contacting Fletcher Challenge Energy. Any marketing initiatives would have to be discussed and agreed by the Pohokura Joint Venture.

The Pohokura prospect is operated by Fletcher Challenge Energy (33.3%) on behalf of the PEP 38459 Joint Venture comprising of co-venturers; Preussag Energie (33.3%), Shell Petroleum Mining (18.3%) and Todd Petroleum Mining (15%).

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