Australian-based explorer Melbana Energy (ASX: MAY) and its joint venture partners have submitted a notice of discovery to New Zealand’s oil regulator after exceeding expectations during testing of the Pukatea-1 Mt. Messenger oil zone.
Pukatea-1 is found in the country’s Taranaki Basin, at Petroleum Exploration Permit 51153.
Melbana said the well perforated in 12.9 metres of sand flowed naturally, without needing an artificial lift, and achieved the initial flow rate of 600bbl day on a 28/64” choke.
The Melbourne-based company’s partner in the venture, Canadian explorer and production company TAG Oil (TSX: TAO; OTCQX: TAOIF), said over a 12-hour test period, with the choke set at 24/64”, the well flowed at a stabilised rate of about 276bbl/d — 74% oil.
Following testing, the oil was then combined with other locally produced oil and sold at Brent oil pricing to the market.
Melbana chief executive Robert Zammit viewed the results positively.
“This is a very positive test result and at the upper end of our expectations for the Mt. Messenger zone,” he said.
“In addition to allowing the joint venture to declare a discovery, this provides the joint venture with a basis to commence planning for the next stage of the development of the resource and the potential restart of production from the currently suspended Puka field.”
TAG chief Toby Pierce highlighted the potential for another oil field development in New Zealand.
“This very encouraging flow test paves the way for another potential TAG Oil-operated high-netback oilfield development in New Zealand,” he said. “With TAG Oil’s current daily net production at about 1297bbl and with Brent oil prices currently over $68 a barrel, we continue to realise solid cash flows as we optimise our Taranaki operations with a view to increase production within our core operating areas.
TAG, which holds 70 per cent of the exploration permit, emphasized it also housed the Puka-2 oil well, saying the well could monetised during field development.
Earlier this month, Melbana announced it had made a deal with Cuba’s national oil company Cubapetroleo to assess opportunities to enhance current oil production at the Santa Cruz oil field.
The Cubapetroleo-operated Santa Cruz field is located in shallow water and was discovered in 2004 and has been producing oil since that time from wells dried onshore.
The field is located on the northern coast of Cuba, in Mayabeque province, about 45km from Havana between Boca de Jaruco and Canasí oil fields and approximately 150 km west of Melbana’s existing Block 9.
Melbana has exclusive rights to study and assess the potential to increase production at Santa Cruz, with an aim to exclusively negotiate a long-term incremental oil recovery production-sharing agreement.
The Melbourne company would undertake oil-production enhancement activities under such an agreement, taking all oil produced beyond a baseline rate.
Melbana chief Mr Zammit was pleased with the deal when the company unveiled news of the agreement on March 8.
“This is a very significant development for Melbana and its investors,” he said.
“Melbana is continuously seeking ways to expand our position in Cuba to build on our world-class exploration acreage in Block 9 and we are delighted to have executed this agreement.
“We appreciate the opportunity to apply our technical capability with the aim of increasing oil production from the established Santa Cruz oil field. If our study confirms the potential that our initial screening activities have identified, we anticipate developing a work program that will provide the basis of a long-term incremental oil production sharing agreement over the Santa Cruz oil field, entitling Melbana to production above a base line oil production rate and potentially the ability to book reserves.”
The company said the Santa Cruz agreement put the Melbana on an accelerated pathway to becoming an oil producer in Cuba.
Melbana also holds exploration assets in Australia.
Melbana securities added 27.3% to 1.4c by late morning trade.