| AUGUST 2003 - RELEASES |
| ROC'S FINANCIAL RESULTS FOR FIRST HALF 2003 ("1H03") (29-08-2003) |
SUMMARY The half year was characterised by robust operating results, real progress on potential new field developments and a consolidation of interests in core areas. Strong UK gas prices, low operating costs and continuing good performance from the Saltfleetby Gas Field, generated $31.9 million sales revenue; $23.2 million cash flow from operating activities and a $17.3 million trading profit; respectively up 19%, 21% and 42% on the corresponding period last year. An after tax profit of $0.9 million represents a $6.7 million turnaround on the same period last year and was achieved despite the adverse impact of net foreign currency losses of $3.7 million and exploration expenditure expensed and written off of $4.4 million. The adjusted profit after income tax expense was $6.5 million; up $4.2 million (182%) on the corresponding period last year. The detailed technical review which followed the successful 1Q03 appraisal drilling at the Cliff Head Oil Field, offshore, Western Australia, triggered a call for bids for Front End Engineering and Design work during August 2003. Interpretation of 3D seismic in the Beibu Gulf, offshore China, provided positive results which led to a commitment to drill at least two and perhaps as many as four wells during 4Q03. Portfolio interests were increased in core areas onshore Angola and in the Perth Basin, Western Australia.
$23.2
million cash flow from operating activities
$71.2 million cash assets
Modest debt level further reduced to US$17.3 million
$28.33/BOE before tax cash margin on Saltfleetby production, equivalent
to 82% of Saltfleetby sales revenue
Trading profit $17.3 million
$4.6 million profit before tax
$0.9 million after tax profit
$6.5 million adjusted profit after income tax expense
$31.9 million sales revenue
0.9 MMBOE production
$13.1 million EBITDA
CEO'S COMMENTS Commenting on the results, ROC's Chief Executive Officer, Dr John Doran, stated: "ROC's financial result speaks for itself. If cash is king, ROC had a very good first half. If the crucial ingredient for achieving a good result is having several potential new field developments in the pipeline, ROC certainly had a very good half year. Operations at the Saltfleetby Gas Field in the UK continue to be low key, low cost and high cash margin. According to ROC's calculations, if the Company was to achieve a similar cash flow from operations in Australia, even with similar low operating costs, it would need to produce more than 80 MMSCFD. During 2H03 ROC expects to focus increasingly on the best way of financing its three potential development projects without curtailing its high activity level in other areas. Any small company in this position - with three potential new field developments all moving forward essentially in the same time frame - would be optimistic about its future production profile. ROC, however, realises the importance of ensuring that the most appropriate financial structure is in place ahead of major development costs being incurred. Fortunately, all three potential developments are expected to be project financeable because of their nature and location.
Dr John Doran Return to ASX Releases main page
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| CLIFF HEAD OIL FIELD, OFFSHORE PERTH BASIN, WESTERN AUSTRALIA (27-08-2003) |
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• Tenders
for the grant of a contract to carry out a front-end engineering and design
("FEED") study for the Cliff Head Oil Field, offshore Perth
Basin, Western Australia, were issued on 25 August 2003.
ROC, as Operator of the WA-286-P exploration permit, which contains the Cliff Head Oil Field in the northern part of the offshore Perth Basin, issued tenders for the grant of a contract to carry out a FEED study on 25 August 2003. An in principle decision on the development of the Cliff Head Oil Field will be taken in September 2003 and, if that decision is positive, the FEED contract is expected to be awarded in October 2003. Once the successful tenderer has been appointed, the FEED study is expected to take approximately four months.
Robert
Gerrard Return to ASX Releases main page |
| SALTFLEETBY-7 WELL DEFINES THE MARGIN OF A DISCRETE OIL ACCUMULATION ABOVE THE FIELD'S MAIN GAS RESERVOIR (21-08-2003) |
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• The
Saltfleetby-7 appraisal/development well, drilled from the Saltfleetby
"B" Production Site, has penetrated the first of its three reservoir
objectives and come in essentially on prognosis, clipping the edge of
a discrete oil accumulation in the Brinsley Abdy Formation, some 250 metres
above the field's main Westphalian gas reservoir. This oil accumulation,
evidenced in Saltfleetby-7 by drill and log data, was first identified
in 1999 when Saltfleetby-3 encountered 12 metres of good quality net pay
and recovered 31.5° API oil. However, until now, this oil accumulation
had been regarded as being beyond seismic resolution and, therefore, it
had not been appraised by subsequent wells. • The
Satlfleetby-7 result confirms ROC's new seismic model which was constructed
on the basis of reprocessed 3D seismic data and well information. On this
basis, it is estimated that the oil accumulation is stratigraphically
entrapped over an area of approximately 5 sq km/1,200 acres with a gross
vertical oil column of about 59 metres of which towards 14 metres (24%)
represents net oil pay. On this basis, the oil accumulation will now be
considered for further appraisal and/or development. • It
is too early to provide a detailed recoverable reserve estimate for the
newly defined oil accumulation but an order of magnitude indication, subject
to further technical review, is between two and three million barrels. • The oil accumulation is 100% owned and operated by ROC and very well located in terms of operational logistics and likely lead time to first production. As such, the Brinsley Abdy at Saltfleetby will now join ROC's three other pre-development projects in China, Mauritania and Australia, as a potential addition to the Company's reserve base and source of future production revenue.
The Saltfleetby-7 appraisal/development well, drilled from the Saltfleetby "B" Production Site, commenced drilling on 11 July 2003 (see ROC's ASX release dated 16 July 2003). Since the last drilling report, issued by ROC to ASX on 25 July 2003, Saltfleetby-7 has drilled to a present Total Depth of 2,189 metres drill depth (2,070 metres True Vertical Depth Sub Sea ("TVDSS") and set 13-3/8 and 9-5/8 inch casing strings at 628 metres and 1,515 metres drill depth respectively. One of Saltfleetby-7's objectives was to try to define the margin of an oil accumulation in the Brinsley Abdy Formation which lies some 250 metres above the field's main Westphalian gas reservoir. The top of the Brinsley Abdy in Saltfleetby-7 was encountered at 2,004 metres TVDSS, three metres high to prognosis and 26 metres TVDSS high to the top of the Brinsley Abdy in Saltfleetby-3, which was drilled in 1999 and which provided the first clear cut evidence of this oil accumulation. As of midnight Wednesday, 20 August 2003 (UK time), Saltfleeltby-7 was pulling out of hole following a Drill Stem Test ("DST") which was aborted due to mechanical (packer) failure. The test, based on log and drill data which indicate the presence of oil, was conducted over a 27 metre vertical interval from 2,001 TVDSS to 2,028 metre TVDSS. Drill and log information indicate that the high angle Saltfleetby-7 has penetrated two oil sands with a combined gross vertical thickness of 7.2 metres of which 1.4 metres (19%) is poor quality net oil pay. In 1999, Saltfleetby-3 penetrated the same Brinsley Abdy accumulation in a fortuitously more optimal position and recovered 31.5° API oil while logging a gross vertical oil column of 18 metres of which 12 metres (67%) was good quality net oil pay. The modest magnitude and relatively poor quality of the Brinsley Abdy reservoir sands in Saltfleetby-7 is consistent with pre-drill forecasts (see ROC's ASX release of 16 July 2003) for this peripheral location on the edge of the Brinsley Abdy oil reservoir. As stated in ROC's 16 July 2003 ASX release, the Saltfleetby-7 well trajectory was designed opportunistically so as to enable it to penetrate, for minimal extra cost, the edge of the Brinsley Abdy oil accumulation as indicated by the latest mapping which is based on ROC's new 3D seismic model. Because ROC did not want to compromise the well's intersection with the deeper gas targets, which remain the well's primary objectives, the Company was constrained as to which part of the Brinsley Abdy oil accumulation could be reached by the up hole part of Saltfleetby-7. According to the most recent seismic modeling, the validity of which now appears to have been confirmed, the Brinsley Abdy oil accumulation is a stratigraphic trap extending over an area of up to 5 sq km/1,200 acres. Neither Saltfleetby-7 nor Saltlfeetby-3 encountered an Oil-Water Contact ("OWC") but pressure data from Saltfleetby-3 indicate a possible OWC at about 2,063 TVDSS which, if correct, infers a gross vertical oil column in the order of 59 metres. Possible net pay ranges up to at least 14 metres (24%). On this basis, ROC will be quick to review options for further appraising and, if merited, developing this oil accumulation. Subject to not attempting to re-run the DST, the forward plan for Saltfleetby-7 is to recommence drilling towards the main Westphalian gas reservoir and beyond that to the underlying Namurian gas reservoir target. The well is expected to reach the next reservoir objective, the main Westphalian gas sand, within the next week.
Commenting on the most recent results of Saltfleetby-7, ROC's Chief Executive Officer, Dr John Doran, stated that: "The Saltfleetby-7 results have added a fourth potential development project to ROC's portfolio, placing the Brinsley Abdy oil accumulation at Saltfleetby alongside ROC's other pre-development projects offshore China, Australia and Mauritania. The potential relevance of the Brinsley Abdy accumulation is best illustrated by the fact that if the higher end of the 2 to 3 million barrel estimate of recoverable oil reserves proves to be correct, ROC will book a net increase in reserves not dissimilar to that which it hopes to be able to book if the Chinguetti Oil Field, offshore Mauritania, proves to be commercial. For four years our technical team has been a little frustrated by the fact that we did not have any reliable means of delineating a discrete and potentially commercial oil accumulation which was known to exist above the main gas reservoir of the Saltfleetby Gas Field. Fortunately, Saltfleetby-7 has confirmed that we now have the technology that enables us to define the magnitude and extent of that oil accumulation. This will allow the commercial potential of the oil accumulation to be determined so that it can be considered for test oil production via a future well which will specifically target the Brinsley Abdy, hopefully during the first half of 2004, subject to receiving relevant statutory approvals. The
relatively poor Brinsley Abdy reservoir development at Saltfleetby-7 doesn't
worry us at all because we know that that reservoir is much better developed
in other parts of the field including, for example, at the Saltfleetby-3
location. In a sense, it would have been more worrying if the Brinsley
Abdy reservoir drilled by Saltfleetby-7 had been different because then
it would have cast doubt on the integrity of our new seismic model."
Dr
John Doran |
| ROC CONSOLIDATES INTEREST IN CABINDA SOUTH BLOCK, ONSHORE ANGOLA (19-08-2003) |
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• ROC's acquisition of an additional 15% interest in the Cabinda South Block, onshore Angola, held by Lacula Oil Company Limited ("Lacula"), previously announced on 15 July 2003, was completed on 18 August 2003.
Following completion, ROC now has a 60% interest in, and is Operator of, the Cabinda South Block. ROC's co-venturers in the Block are Force Petroleum ("Force") (20%), a privately owned company, and Sonangol (20%), the National Oil Company of the Republic of Angola, which is carried through the exploration stage by the non-government parties.
Robert
Gerrard |