Great South hopes now pinned to Pukaki

Press, 9 November 1983, Page 45

Great South hopes now pinned to Pukaki

By

MARTIN FREETH

Hopes of an oil strike in the Great South Basin have now shifted to the Pukaki structure, the second to be drilled in the Placid Oil’s programme. This follows an annoucement yesterday by the Hunt exploration company that the first well, Rakiura, is dry. News of the dry well caused a sharp reversal in prices on New Zealand stock exchanges yesterday, the NZUC mining and oil index losing 14.12 points of the gain of 18.23 points it made on Monday, after the hydrocarbon find reported at the Moki No. 1 well off the coast of Taranaki. The sharp reversal in the oil issues was reflected in the price of Southern Petroleum, which has a 14.5 per cent interest in the Great South Basin exploration. Its contributing shares traded between 14c and 30c, for a price of 20c on its largest parcel, compared with a price range of 30c and 35c on Monday and a main price of 33c. A total of 3.3 million mining and oil shares was traded yesterday, down about 100,000 on the previous day. The Pukaki hole, 220 km south-east of Stewart Island, will be deeper than Rakiura and involves the prospect of a greater oil find than that optimistically predicted for Rakiura, on the Tikkitak structure. Placid Oil said the Penrod 78 rig would be moved to the new drill location later this week. The company’s operation’s manager, in Invercargill, Mr Raymond Huffman, said Rakiura had been drilled to a depth of 7902 ft with no hydrocarbon shows encountered. The well had been plugged in preparation for abandonment. The Pukaki basement depth will be 10,168 ft. The secondary objective, expected at 7216 ft, is a caronbate reservoir which, depending on its level of porosity, could contain up to 370 million barrels. The primary objective, expected at 9350 ft, is though to be a large sand reservoir which could contain 1.9 billion barrels if full, and even if only partly full, near 1 billion barrels.

The Rakiura well is on the Tikkitak structure and the geological survey carried out for participant companies in the drilling programme estimated it could have held 910 million barrels of oil, in two sand reservoirs, one much deeper than the other.

The hole is the fifth failure in this licence area for the Texas-based Hunt group; its drilling programme in the 1970 s produced a dry hole and three wells with uneconomic oil finds. The Rakiura hole was unsuccessful but its drilling has proved the worth and durability of the giant Penrod 78 rig, built in Japan and delivered to Placid Oil in August.

The rig spudded in Rakiura on October 11 and the plugging after 28 days comes well within the 42day drilling time originally

expected. Terrible weather caused no delays and the drilling was much faster than the

rig’s predecessor, Penrod 74. Mr Huffman said yesterday that while there was great disappointment at the result, satisfaction could be taken at the performance of the rig and its crews. “We are very pleased with its operational progress and its excellent responses to the weather.” Mr Huffman declined to give information on when the new well is likely to be spudded in and how long its drilling might take. “We take each well as an individual,” he said. The programme for each had to be only tentative as unforeseeable weather and drilling conditions very much determined progress. He said a public state-

ment would mark the spudding in and progress reports would follow fortnightly until drilling produced some significant results indicating success or failure. Southern Petroleum is the only New Zealand publicly listed company to have a direct participating interest in the Great South Basin exploration. Its share of the total cost of the two-well programme is about $8.9 million, about 60 per cent of the funds raised by the company’s recent flotation. Petrocorp (Exploration), Ltd has a 51 per cent interest. The three other interest holders, which include Placid Oil, are Texasbased companies.