Horizon Oil - Oil and Gas Exploration Production
Activities Operations
New Zealand
New Zealand Activities Operations
PMP 38160 – Maari / Manaia fields (10.00%)
Current status of activities:
Horizon Oil’s working interest share of production from Maari and Manaia fields was 129,151 barrels of oil. Crude oil sales were 127,418 barrels at an average realised price of US$117.71 per barrel. Cumulative oil production from the fields through 30 October 2011 was 16.1 million barrels, generating approximately US$1.4 billion in gross revenue.
Production for the quarter continued to be below expectation because of unreliable performance of the downhole pumps (ESPs) and, to a lesser extent, scale build-up in some well completions. At the time of this report, the MN1 ESP was being worked over to replace the ESP and the MR9 well was shut-in awaiting an acid job to remove scale.
As was reported in the last quarterly report, the field operator has engaged with the pump supplier to improve ESP design and performance and to maximise run-time. In addition, an acid treatment procedure has been instigated to remove existing scale and to prevent further scaling with a regular maintenance program that does not require workover. This involves fitting the wells with equipment to provide access for the introduction of acid and is being implemented as and when wells require workover. We expect to see gradual improvement in field performance as these measures take effect.
With the field now in its third year of production, opportunities to improve production rate at relatively low cost by way of enhanced water injection efficiency are being recognized. As a result, re-perforation of the MR6 injector well in the M2A zone and the MR8 injector well in the upper Moki zone (see cross section below) are planned as part of the current workover program. Additionally the injection pump capacity will soon be increased to inject more water into the reservoir zones.
The field operator is working on a comprehensive assessment of an appraisal program to delineate the considerable additional oil resource potential of the Manaia structure (Moki, Mangahewa and deeper F Sand zones), Maari (Mangahewa and F Sand) and the Maari South prospect. As part of this effort, a new 3D seismic survey covering Maari and Manaia is being planned for acquisition in the coming summer. Two appraisal wells are being considered on the Manaia and Maari South features for drilling in 2012/2013.
The participants in the development are:-
Horizon Oil International Limited
(a wholly owned subsidiary of Horizon Oil Limited) 10%
OMV New Zealand Limited (Operator) 69%
Todd Maari Limited 16%
Cue Taranaki Pty Ltd (a wholly owned subsidiary
of Cue Energy Resources Limited) 5%
Background:
The Maari development, operated by OMV (New Zealand) Ltd, is located in PMP 38160 some 80 km offshore Taranaki, New Zealand in 102 m of water. The field, in which Horizon Oil has a 10% interest, holds proven and probable reserves in excess of 50 million barrels of oil.
Horizon Oil acquired a 10% interest in this field in January 2003 and participated in the drilling of the Maari 2 appraisal well. The Maari-2 well successfully appraised the central part of the field and led to commencement of the field development planning process.
In November 2005, the operator of the Maari joint venture, OMV New Zealand Limited, advised the go ahead of the development of Maari field. The development concept involves an unmanned wellhead platform housing the wellheads of the 5 production and 3 injection wells, linked via subsea flowlines to the floating production, storage and offloading vessel (‘FPSO’) Raroa, anchored 1.5 km away.
On 7 December 2005 it was announced that the New Zealand Government’s Ministry of Economic Development had granted Petroleum Mining Permit (‘PMP’) 38160 for the field, covering an area of 34 sq km. The PMP grants the joint ventures’ the rights to conduct production operations for a period of 22 years, reflecting the long life predicted for production from the main zone at Maari, as well as from shallower and deeper zones which have not yet been fully appraised.
The Manaia-1 well spudded on 2 August 2009 and is planned to take 45 days to drill. The horizontal completion section of the well in the Mangahewa formation is planned to be up-dip of the Maui-4 discovery well drilled in 1970, which flowed 575 bopd from a vertical exploraiton well through that zone. As at the date of this report, the well has penetrated the top of the reservoir, set 6,385 m of 9-5/8" casing and was ready to drill the horizontal section. If warranted, the well will be equipped for production and flowed to the Maari FPSO.
The Manaia structure is located in PEP 38413 and lies adjacent to PMP 38160 (Maari), some 80 km offshore Taranaki, New Zealand. The field, in which Horizon Oil holds a 10.00% interest, is expected to hold 1 – 2 mmbo in net resources, subject to appraisal.
On 1 July 2010 the New Zealand Crown Minerals Group approved the
extension of the Maari PMP 38160, as requested by the Maari joint
venture, to incorporate the remaining area of PEP 38413 which contains
Manaia field. The permit term of 22 years expires on 2 December 2027
and further extension is permitted under the New Zealand Crown
Minerals Act. The total area of the expanded petroleum mining permit
is 80.18 sq km and includes all the known GMA oil accumulations - the
Maari Moki, M2A
and Mangahewa zones, the Manaia Moki and
Mangahewa zones and the Maari South prospect. The expansion of PMP 38160 enables the Maari
joint venture to commence production from the successful MN1 well
in the Manaia Mangahewa reservoir and to further exploit the GMA.
Horizon Oil maintains a 10% interest in the expanded permit area,
which offsets the large PEP 51313 (2,595 sq km), in which Horizon
Oil holds a 30% interest.
PEP 51313 - Matariki (30.00%)
Horizon Oil announced a farm-in to permit PEP 38494 on 3 September 2008 with the intention of earning a 25% interest in the block, which lies immediately adjacent and south of the Maari and Manaia permits.
During the course of this year, the licensing position has been modified and increased to cover a new block PEP 51313. Horizon Oil has agreed to farm-in to this bigger block for a 30% stake.
Current status of activities:
Processing of the newly acquired 636 km 2D seismic survey over the Te
Whatu and Pukeko prospects (see map above) was completed and interpretation is underway.
Interpretation of the merged 3D seismic coverage over the Maari
-Pike-Matariki trend has
highlighted the Pike prospect as the most likely candidate for drilling of the first well. It is likely
that Pike will be drilled using the rig mobilised for drilling of two appraisal wells on Manaia and
Maari South in 2012/2013.