east west petroleum corp (EWPMF) Key Developments
East West Petroleum Corp. and TAG Oil Ltd. Announce Operational Update for New Zealand
Sep 4 14
East West Petroleum Corp. provided update on its operations in New Zealand. TAG Oil Ltd. is the operator and co-owner of all of the company's licenses in New Zealand. PEP 54879 (Cheal South), 50% East West, The Cheal-G1 well on the Cheal South permit has completed its scheduled 11-day flow test. Approximately 1,020 boe (94% oil) was produced during the test. Over the last 5 days of the test, the well averaged 127 boepd (93% oil) of steady production utilizing a jet pump artificial lift system. The well is now shut in and undergoing temperature and pressure analysis. The joint venture partners are continuing to review the prospectivity of the area accessible from the Cheal G-site to identify further drilling targets. The oil produced during the test has been comingled and sold with production from the Cheal E-site. Under the PEP 54879 joint venture agreement with TAG, East West is entitled to receive 100% of the first $2.5 million of revenue from the permit, while paying 100% of the costs to produce that revenue, in return for funding the first $2.5 million in exploration costs. After receiving the first $2.5 million in revenue, all revenues and costs will be split on a 50:50 basis between the joint venture parties. PEP 55770 (East Coast), 40% East West, East West announced that the joint operating agreement for PEP 55770 located in the East Coast Basin has been finalized with the permit operator TAG Oil Ltd. who holds a 60% interest in the permit. PEP 55770 was awarded in the 2013 New Zealand Block Offer and has a term of 10 years commencing April 1, 2014. Under the terms of the permit and JOA, the committed work includes the reprocessing of existing seismic data during the first 12 months. Post the completion of the committed work, and should the joint venture choose to continue with the permit, the next six months contingent work will entail the acquisition of 60 km of 2D seismic data followed a further contingent work period of 12 months which would include the drilling of one exploration well. Reprocessing of existing seismic data is currently underway. In addition, East West is awaiting the results of TAG's Waitangi Valley-1 well which is drilling in the nearby PEP 38348. Under the terms of the JOA and in return for funding 100% of the program mentioned above, East West will have access to all of the data and results of the Waitangi Valley-1 well, which will be combined with the reprocessed seismic to assess the prospectivity of PEP 55770 before committing to seismic acquisition in H1 2015. PEP 54877 (Cheal North), 30% East West, Production from the Cheal E-site remains stable with a low decline rate. July achieved the higher monthly average daily rate to date with 882 boepd (gross, 78% oil) produced through July from the Cheal-E1 and the E4 wells which continue to flow naturally and the E5 well which is on artificial lift with a jet pump. To date, the Cheal E-site has produced approximately 176,000 BOE (gross, 81% oil) since production started in mid-November 2013. In addition, a joint venture review of the Cheal-E2 drilling and completion operations that targeted the Urenui Formation determined that mechanical completion issues prevented commercial production from the Urenui. After comparing these results with all of the E-site drilling data now available and comparing with seismic coverage over the permit, the joint venture has decided to isolate the Urenui Formation in this well and re-complete Cheal-E2 to establish production from the Mt. Messenger Formation. Following recompletion, the E2 well will undergo flow testing and temperature and pressure analysis. The estimated net cost to East West is approximately NZD 240,000. The Nova-1 rig is scheduled to be used to drill the Cheal-E6 well on the PEP 54877 permit from the Cheal E-site prior to year end. The net costs of the Cheal-E6 well are approximately $1 million to East West and will be funded from the Company's existing cash balance. The Cheal E-site has the capacity for 12 wells to be drilled from the well pad and work continues by the joint venture partners to identifying additional E-site drilling targets for drilling in 2015.
East West Petroleum Corp Reports Operating Results for the 15 Months Ended March 31, 2014
Jul 21 14
East West Petroleum Corp. reported operating results for the 15 months ended March 31, 2014. The company reported that three wells currently on permanent production, testing pending on one additional well, and one well awaiting rework. First production achieved in November 2013, with two further wells onstream in the first quarter of 2014. From inception in November 2013 through March 2014, production averaged 414 b/d, which benefitted from the company receiving 100% of the first $5 million in revenue from the Cheal E-site under the joint venture agreement with TAG Oil. Average price per barrel received for oil sales during the January to March 2014 period was $107.57. Netback to the company after royalties, transportation and storage, and production costs was $83.78/b Production in May and June averaged approximately 180 b/d and 200 b/d, respectively, net to East West. All licences now ratified in Romania and seismic acquisition progressing in advance of the 12-well exploration program, all of which to be fully funded by NIS.
East West Petroleum Corp. Provides Taranaki Basin Operations Update
Mar 10 14
East West Petroleum Corp. provided the following update on its operations in the Taranaki Basin of New Zealand. The Company's joint venture partner, TAG Oil Ltd. is the operator of all licenses. Cheal-E1, E4, and E5 wells, all located on the Cheal North East Permit, are all productive oil wells that have cumulatively produced approximately 60,000 bbls of oil to date. East West has now recovered the initial $5 million in revenue for its contribution of the first $5 million in costs for the initial drilling program on the permit. Cash flow from Cheal-E1 and E4 alone is expected to fund the company's committed capital expenditures for the remainder of calendar year 2014. This program includes at least one well on PEP 54876 (Southern Cross) permit and at least one new development well on the Cheal North East Permit following up the success to date where the company and TAG have established steady production and cash flow at E-site. The Cheal-E2 well, with similar reservoir qualities as the three producing Cheal E wells, is presently awaiting a work over that is planned for mid-March, prior to initiating a testing program on the potential producing zone encountered by the Cheal-E2 well. The Cheal-E3 well also encountered what the joint venture partners believe is commercial net pay based on petro-physical interpretation of the well log data. Data related to Cheal-E3 will be evaluated in advance of further work being completed on the well. In January /February 2014, three wells were drilled consecutively from the Cheal-G Site on the Cheal South Permit. East West funded the first $2.5 million in costs of a three well drilling program with both companies paying their 50% share after the initial investment of $2.5 million. Cheal-G1 was drilled to a total depth of 2,384 m and encountered six meters of hydrocarbon filled reservoir rocks within the Mt Messenger Formation as expected. The well was cased and is currently waiting on completion testing. Both Cheal-G2 and G3 encountered hydrocarbon filled reservoir sections within the Mt Messenger Formation, but both were interpreted to have sub-economic thicknesses and have been plugged and abandoned. The joint venture partners will review all results associated with the drilling program prior to conducting future operations on the permit. All Cheal-G site wells were drilled on time and on budget. The Nova-1 rig will now move from the Cheal South Permit to the Southern Cross Permit in approximately two weeks to drill up to two wells on this new permit following completion of construction of the Southern Cross well site. Southern Cross is located immediately to the North of the Cheal North permit that contains the company's Cheal-E wells. All permits and consents have been granted for drilling on the Southern Cross permit.
East West Petroleum Provides Operational Update on Operations in Taranaki Basin of New Zealand and in Romania; Provides Capital Expenditures Guidance for 2014
Feb 18 14
East West Petroleum Corp. provided the following operational update on its operations in the Taranaki Basin of New Zealand and in Romania. The Company's joint venture partner, TAG Oil Ltd. is the operator of all licenses in New Zealand, while in Romania the Company's partner Naftna Industrija Srbije is the operator of all concessions. The Company reported that to Feb. 15, 2014 the gross production from the Cheal E-site totaled over 50,000 boe. The Cheal-E1 well is currently producing at a rate of over 500 boepd (87% oil) through a 17/64" choke. The Cheal-E4 has been on test production since January 1, 2014, with an average production rate of over 280 boepd (83% oil). The Cheal-E4 well will soon be placed on permanent production following a temporary shut-in period to allow for temperature and pressure analysis while other E-site wells are flow tested, starting with Cheal-E5. The initial production testing data is being used to determine the long-term production scheme for the site. Under the joint operating agreement with TAG, East West paid 100% of the first CAD 5 million in drilling costs on the Cheal E site and is entitled to receive 100% of the first CAD 5 million in revenue, while paying 100% of the costs to produce that revenue, after which all revenue and costs will be shared 70:30 between TAG and EW. To date, over 23,000 barrels of oil have been sold at an average price of over USD 109/b from which the Company estimates it will receive cash netbacks of over USD 80 per barrel. East West expects to have recovered the $5 million in revenue by the end of first quarter of 2014.
The Company also announced that the minimum committed 2014 capital expenditures in New Zealand for East West are expected to total CAD 10.4 million, which will include the drilling of three wells from the Cheal G-site, one well at Southern Cross, and at least one well from the Cheal E-site. In addition, seismic acquisition and reprocessing is planned for the Taranaki and East Coast permits in 2014. Further wells to the 2014 drilling program are expected to be added following the completion and interpretation of the results of the current drilling program. Capex for the 2014 committed work program and any additional wells will be financed from the Company's existing cash balance and from production from Taranaki Basin permits.
East West Petroleum Corp. Provides the Operational Update on Activities in the Taranaki Basin of New Zealand
Jan 9 14
East West Petroleum Corp. provided the operational update on its activities in the Taranaki Basin of New Zealand. All of the wells are operated by joint venture partner TAG Oil Ltd. The company has been informed by TAG the initial five well drilling program at the Cheal-E site on the Cheal North permit (PEP 54877) was successfully completed in mid-December. Cheal-E1 has been naturally flowing, 17/64" choke, for 44 days and has produced at an average of 547 boe/d (88% oil) while Cheal-E4 has been naturally flowing, 10/64" choke, for seven days and has produced an average of 315 boe/d (87% oil); both wells having produced in aggregate more than 23,100 barrels of oil to date (26,400 boe). Following perforation, Cheal-E2 and Cheal-E3 tested oil naturally to surface and will require artificial lift to maximize production as expected. This work, in addition to the perforation and completion of Cheal-E5 will be initiated in the second half of January as equipment becomes available. As required work is completed, Cheal-E site wells will be tied in for permanent production at TAG's recently commissioned Cheal-E site separation facilities. Pending completion of the outstanding activities at E-site and further analysis of all results, the joint venture estimates there is potential for 15 20 follow-up locations on the permits awarded in December 2012.