WELLINGTON, New Zealand, July 24 /PRNewswire-FirstCall/ -- Austral Pacific Energy Ltd. (TSX-V and NZSX: APX; AMEX: AEN) (Austral Pacific) announced today that the PPL 235 joint venture is about to embark on studies designed to evaluate the options for commercialising its Douglas gas discovery in Papua New Guinea. Austral Pacific has a 35% interest in PPL 235, the other joint venture participant being Rift Oil PLC (65%).
The Douglas-1 well reached a target depth of 1978 metres on 26th May 2006. The drilling and wireline logging results have now been fully evaluated and the conclusion drawn by the joint venture's technical committee is that the Douglas well appears to be an exciting gas discovery with a significant gas resource of potentially several hundred billion cubic feet contained in a large structure with a maximum area of over 40 square kilometres. The discovery is also expected to serve to lower the exploration risk for other identified prospects and leads in the licence. It is the joint venture's current intention to proceed with a detailed feasibility study to determine a commercialisation strategy for this resource.
The excellent results obtained from the drilling record, wireline logs and in particular from the Multi-Formation Tester, indicate that there are two reservoirs (Alene and Toro) of sweet gas with good deliverability and likely moderate condensate content. The joint venture had initially considered conducting flow testing on the Douglas-1 well but given the logs and MFT as well as the knowledge obtained from data from nearby wells, the joint venture believes it has a sound understanding of the envelope within which the formation and fluid properties lie such that incurring the costs of flow testing would not be warranted at this time.
The joint venture is also planning to acquire additional seismic in the licence in order to determine the extent of the Douglas resource, to define appraisal well locations on the Douglas structure and to define exploration drilling locations on other prospects. The joint venture is planning to bring forward to the 4th quarter of 2006 its commitment to acquire and process 50 kilometres of new 2D seismic. The new seismic data, when integrated with the existing data base, will elevate the joint venture's understanding of the prospectivity of the licence and will be critical in determining the best locations for future drilling and enable the joint venture to maximise the return on its investment.
In making the announcement Austral Pacific's Chief Executive Officer, Rick Webber, said, "The goal for our company is to create shareholder wealth by establishing and growing a low cost, sustainable oil and gas production profile. The discovery of gas at Douglas, the initiation of studies to look at the options for commercialising the resource, and the acquisition of further seismic in the Douglas licence to help us understand the extent of the resource and the prospectivity in the licence area are key steps along the path to that goal."
Clarification
At its recent Annual General Meeting, the Company stated that merger and acquisition activity would be a potential component in its growth strategy and since the meeting the Company has noted the existence of rumours of an impending transaction involving the Company. The Company confirms that while M&A activity remains part of its corporate development strategy, it is not currently in any merger discussions with any party.
None of the Exchanges upon which Austral Pacific's securities trade have approved or disapproved the contents hereof. This release includes certain statements that may be deemed to be "forward-looking statements" within the meaning of applicable legislation. Other than statements of historical fact, all statements in this release addressing future production, reserve potential, exploration and development activities and other contingencies are forward-looking statements. Although management believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance, and actual results or developments may differ materially from those in the forward-looking statements, due to factors such as market prices, exploration and development successes, continued availability of capital and financing, and general economic, market, political or business conditions. See our public filings at http://www.sedar.com/ and http://www.sec.gov/edgar/searchedgar/webusers.htm for further information.
Web site: http://www.austral-pacific.com/
Contact: Rick Webber, CEO, +64-4-495-0888
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