AWE: Pre-completion well costs increase to USD 99 mln

AWE Limited reports that, based on the significant additional work required to mitigate the mechanical difficulties and drill the two sidetracks at Pateke-4H development well, gross pre-completion well costs have increased.

The well costs have increased beyond the pre-drilling estimate of USD 55 million (AWE share 32 million). The revised estimated gross pre-completion well cost is USD 99 million (AWE share USD 57 million) with completion costs estimated at USD 12 million gross.

As at 06:00 hours (6.00am NZDT) today Pateke-4H development well was at a total measured depth of 4,772m, including a 749m horizontal section through the reservoir.

The total depth was revised from the original 5,381m target due to the high quality of the reservoir encountered and to ensure a stable well bore was achieved for effective completion and production.

The oil-bearing properties of the Kapuni F10 reservoir are positive. Further analysis is required to determine the expected recovery from Pateke-4H, but initial evaluation suggests a resource range consistent with the pre-drill estimate of approximately 2.5 million barrels gross.

[mappress]

May 06, 2014