Cheal field firing on all barrels for TAGCheal field firing on all barrels for TAG
12 February 2010
The Canadian company that holds the Cheal oil and gas project in the Taranaki has said it was less than halfway through its known reserves and was planning to increase its capacity.
The licence, Petroleum Mining Permit 38156-S is on the onshore Taranaki.
TAG Oil Ltd said the relatively shallow discovery has so far produced more than 500,000 barrels of oil with remaining proven and probable reserves of about 530,000 barrels oil equivalent. (The company’s website cited oil equivalent reserves – oil and gas – of 980,000 boe).
The company said oil produced from Cheal was a high-quality, waxy low-sulphur oil that sells on the Tapis market at a premium to West Texas Intermediate due to its low sulphur content, and was sold primarily to Japan, Korea and Australia.
A “state-of-the-art” treatment facility established in mid 2006 for Cheal was capable of handling up to 2,000 barrels a day of oil.
Brought online at a cost of $US36 million, the facility includes a gas-fired electricity generator that converts solution gas to electricity for use on-site, with all excess sold into the national grid.
TAG said that in addition to planned increases in production from the existing six Cheal wells and overall recovery factor, the company has already reduced operating costs to under $US19/barrel, one of the “lowest operating costs in Australasia, down nearly 70% from more than $US50/barrel under its previous operator”.