Horizon upgrades reserves by 30%

By YEHIURA HRIEHWAZI
WHILE PNG’s attention is focused on the Hides gas fields and the PNG LNG project, not much notice was given to another gas and condensate field that has been proven up and is about to go into production.
Horizon Oil (Papua) last week announced to its shareholders that it had proven up its reserves through independent assessments by 30% and was preparing to go into production.
The gas and condensate field are in Stanley-2 and Stanley-4 appraisal/development wells on the Stanley field in Western Province, on the border of PNG and Indonesia’s Papua province.
This had caused the Indonesian government last week to commit to step up exploration on the border areas because it feared that the hydrocarbon resources could seep over the border to PNG and be commercialised in PNG.
The field lies in petroleum retention licence PRL 4 and participants are: Horizon Oil (Papua) (operator) 50% (a wholly owned subsidiary of Horizon Oil; Talisman Niugini 50% (a wholly owned subsidiary of Ta­lis­man Energy)
Subsequent to the completion of drilling in May 2011, detailed geological and engineering evaluation of the data accumulated during drilling and testing had been finalised.
Horizon Oil, on behalf of the PRL4 joint venture participants and their respective financiers, commissioned an independent assessor, RISC Ltd, to carry out an indepen­dent resource audit of the Stanley gas/condensate field development.
RISC was the leading oil and gas advisory firm in the region, providing independent commercial and technical advice to the oil and gas industry.
The independent and upgraded reserves report will be used to enable Horizon Oil to obtain financing for development capital expenditure funding; provide independent confirmation of gas resources in anticipation of the field owners entering into gas sales contracts; and will constitute a key component of the FID (final investment decision) package.
The upgrade and audited volumes were about 30% higher than the pre-drill volumes.
“Pleasingly, a high level of the 2P (P50) resource is in the proven (P90) category,” the company said in a statement.
Pre-drill estimates in 2008 were: 390 billion cubic feet of gas and 8.9 million barrels of condensate.
Post-drill reserves are 531bcf and (up 36%) and 11.4mmbl (up 28%).
“Stanley field will be developed as a condensate recovery project, with the condensate exported to market via pipeline and river tanker.
“Gas will be available  for possible consumption locally in the near term, with balance of dry gas volume to be marketed in the future to regional industrial consumer(s) or into a possible large-scale gas aggregation project.
“As previously advised, front end engineering and design (FEED) for the development is complete,” the company said.
Stanley field is located about 30km southwest of Tabubil in Western province.
The company said condensate production facility will be located at the Stanley-2 and 4 wells. Access road has been completed and detailed design of plant is underway.
A condensate export pipeline will be built to Ok Tedi Mining Ltd’s Kiunga river port.
The route and survey had been contracted, it said.
The condensate storage facility in Kiunga is underway and a site for condensate load-out facility had been selected.
Horizon, as operator of Stanley development, had targeted early 2014 for the first production.