New Zealand’s Waihapa H1 Restarts Production

Monumental Energy Corp said Monday commercial production has resumed at the Waihapa H1 well in the Taranaki basin onshore New Zealand.

This is the second announced startup under Monumental’s agreement with New Zealand Energy Corp (NZEC) to fund the latter’s share of costs for the Waihapa-Ngaere campaign.

“Interestingly, each day the well flowed better and all seven perforations [in the Mount Messenger formation] performed better than expected. We are not currently able to announce a stable flow rate as we do not have enough capacity on site and tanker trucks to be able to handle the volume”, Monumental chief executive Maximilian Sali said in a statement from the company.

“Currently three tanker trucks are going back and forth from Waihapa H1 to the port in New Plymouth”, Sali said. Flows from Waihapa H1, located within 100 meters (328.08 feet) of the Waihapa production facility, are being sent to a holding tank at the facility, according to Monumental.

“Gas is also being processed to the tune of roughly 1 TJ [terajoule] of gas which is sold immediately to market”, Sali added.

First drilled 2008, Waihapa H1 previously produced oil from the lower Tikorangi formation at rates above 1,500 barrels a day, before production stopped due to a wellbore collapse, according to Monumental.

“The NZEC and Monumental exploration team have identified 60 meters of prospective ‘bypass pay’ in the Mount Messenger formation above the Tikorangi formation, which is the same zone that was perforated at Ngaere-1”, Monumental said.

Ngaere-1 started up earlier this year as the first project under the funding agreement between NZEC and Monumental. The March 5 announcement of the startup said the well was stabilizing at about 120 barrels of oil per day.

“The Mount Messenger formation is the primary zone in the highly successful adjacent Cheal oil field which has produced roughly 12 million barrels of oil from a relatively small area size”, Monumental added in Monday’s statement.

Monumental is investing in the Waihapa-Ngaere fields under an agreement to fund NZEC’s share of costs as a 50-50 co-venturer with L&M Energy Ltd in Petroleum Mining Licenses 38140 and 38141.

“NZEC has granted Monumental a project-specific royalty, effective upon satisfaction of all conditions precedent and commencement of production”, NZEC said in a statement February 4 announcing the completion of the funding agreement. “Monumental will initially receive 75 percent of net receipts, payable quarterly, until its funded costs have been recovered, after which Monumental will receive an ongoing royalty equal to 25 percent of net receipts”.

Separately NZEC and L&M are advancing the Tariki Gas Storage Project, also in the Taranaki basin. “Significant progress has been made on engineering and pre-FEED [front-end engineering design] due diligence activities, and the project continues to move forward as planned”, NZEC said in an operational update March 9. “The joint venture is on track to begin flowback operations at the Tariki-5A well in the coming weeks.

“In addition, the recent commitment by the government of New Zealand to support a liquefied natural gas import facility further strengthens the business case for the Tariki Gas Storage Project”.

“NZEC remains focused on optimizing production from existing wells with partners L&M and Monumental while advancing strategic gas storage infrastructure initiatives in the Taranaki Basin. The company believes these initiatives position NZEC to contribute to addressing New Zealand’s natural gas supply challenges while generating value for shareholders”, NZEC said.

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