For the period ending 31 March 2011
In the first quarter of 2011 the Company completed abandonment activities at Tindalo whilst accelerating the pace of the Gindara-1 drilling campaign. The Galoc field performed strongly with improved uptimes and the Company continued to seek strategic farm-out opportunities for its acreage.
Uptime for the quarter was 98%, a significant increase from 61% during the December 2010 quarter. Total gross oil production during the quarter was 651,551 bbls (149,072 bbls net to Nido), and there were two liftings totalling 706,038 gross bbls of oil (161,538 bbls net to Nido). The average gross production for the quarter was 7,239 bopd and as at the end of the quarter 6.92 million bbls of oil had been produced from the field.
A new prospect, Galoc North, is being assessed by Nido within the context of a Phase 2 development. The Joint Venture is also considering a proposal to upgrade the existing Mooring and Riser System.
Abandonment of the Tindalo-1ST 1 well was completed in January 2011 with the demobilisation of all project equipment from the Service Contract area. The Tove Knutsen FSO was demobilised to Singapore where it delivered the final cargo of Tindalo crude.
A complete review of the Tindalo project is currently being undertaken with a view to applying the lessons learned from this campaign to any future developments that the Company pursues.
In SC 54B, the deepwater semi-submersible rig Atwood Falcon was contracted to drill the Gindara-1 well and the Department of Energy (DOE) approved the Gindara-1 Drilling Program. The well is currently expected to spud in mid-May.
In SC 58, a 12 month extension to Sub-Phase 3 was approved by the DOE during the quarter. Nido intends to undertake a seismic inversion and Amplitude Versus Offset (AVO) project over the leading prospects within the block.
Corporate and Financial Highlights
From a year-end cash balance of AUD $24.2million, the Company’s cash on hand at the end of the quarter stood at AUD $7.6 million.
The reduction in the cash balance was due largely to non-recurring expenditures from the Tindalo abandonment and demobilisation activities (AUD $11.6 million) coupled with the fact that whilst there two liftings from the Galoc field during the quarter, proceeds from the second lifting (USD $8.3 million) were received in early April and proceeds from the residual sale of crude oil onboard the Tove Knutsen (USD $3.0 million) were also received after the quarter’s end.
Debt relating to the Merrill Lynch Convertible Note was reduced to USD $3.1 million as at 31 March 2011 (USD $9.2 million as at 31 December 2010) following repayments by the Company and conversions by Merrill Lynch.
The second quarter promises to be an active and exciting period for the Company with the drilling of the Gindara-1 well, the planning for at least one well in SC63, and farm-out activities in our other blocks.
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