In order to view ROC's REPORT TO THE AUSTRALIAN STOCK EXCHANGE (ASX) - Activities for the Quarter Ended 31 March 2004
click here

Bruce Clement
Chief Operating Officer
E-mail: bclement@rocoil.com.au

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ROC COMMENCES APPRAISAL WELL IN BLOCK 22/12, BEIBU GULF , OFFSHORE CHINA (27-04-2004)

KEY POINTS

· On 25 April 2004, the Nanhai IV jack-up drilling rig commenced drilling the Wei 12-8-3 appraisal well 800 metres north of the Wei 12-8-2 discovery well in Block 22/12 in the Beibu Gulf, offshore China.

BLOCK 22/12, BEIBU GULF, OFFHORE CHINA, (ROC: 40% and Operator)

On 25 April 2004 the Nanhai IV jack-up drilling rig started drilling the Wei 12-8-3 appraisal well in approximately 33 metres of water, 800 metres north of the Wei 12-8-2 discovery well (Attachment 1).

The well is expected to take up to 14 days to drill, core, log and fully evaluate, including the acquisition of a 3D-VSP seismic survey, to a Total Depth of approximately 1,311 metres, prior to plugging and abandonment – which will be undertaken regardless of the results of the well – and rig release. The Wei 12-8-2 structure is estimated to have a mean unrisked proved and probable reserve potential of 20 mmbo, subject to the results of the appraisal drilling.

Unless there are operational problems which would cause the drilling to be more prolonged than anticipated, ROC does not intend to release further information about the well until a preliminary interpretation of the wireline logs over the zone of interest is available, probably in about a week’s time. This is because, in this part of the Beibu Gulf, the reporting of “oil shows” observed while drilling, prior to the interpretation of wireline logs, is not particularly meaningful.

If the results of the Wei 12-8-3 well are encouraging, consideration will be given to drilling a third well, Wei 12-3-4 (Attachment 1).

The Block 22/12 Joint Venture consists of:

Roc Oil (China) Company . . . . 40% and Operator
Horizon Oil Limited . . . . . . . . .30%
Petsec Energy Limited . . . . . . 25%
Oil Australia Pty Limited * . . . .5%

* a wholly owned subsidiary of First Australian Resources

Please note that in the event of a commercial development within Block 22/12 the interests held by the current joint venturers may reduce on a pro-rata basis by up to 51%, assuming that the China National Offshore Oil Corporation ("CNOOC") exercises its right to participate up to a 51% equity level in the development.

Bruce Clement
Chief Operating Officer
E-mail: bclement@rocoil.com.au

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KEY POINT

· ROC is pleased to be able to confirm that an expanded 2004 drilling programme is expected to be undertaken in PSCs A, B and C, offshore Mauritania, where two deepwater drilling vessels will start operations in August/September 2004, subject to a positive Final Investment Decision with regard to development of the Chinguetti Oil Field.

1. Mauritania: PSCs A, B and C (ROC 3.2% to 5%)

In its ASX release dated 15 March 2004 and also in its Prospectus dated 2 April 2004 released in relation to the Rights Issue, ROC indicated that it expected to participate in the drilling of at least four exploration wells in deepwater offshore Mauritania during the latter part of 2004. ROC is now pleased to be able to confirm that an expanded 2004 drilling programme is expected to be undertaken with two deepwater drilling vessels scheduled to commence operations in August/September 2004 subject to a Final Investment Decision regarding the development of the Chinguetti Oil Field which is expected during the current quarter. More specifically:

· Woodside Petroleum Limited, the operator of the Joint Ventures, has recently publicly announced that the 2004 Mauritanian drilling campaign could involve up to 20 wells. Eleven of these wells will relate to the Chinguetti development and were already factored into ROC's share of the estimated development costs for the Chinguetti Oil Field as envisaged by the Prospectus. It is now expected that up to 11 exploration/appraisal wells will also be drilled during the second half of 2004/early 2005. The proposed programme will include a number of appraisal wells on the Tiof/Tiof West oil discovery and possibly an appraisal well on the Banda oil and gas discovery. The details of this programme may change subject to Joint Venture decisions and logistical considerations.

ROC expects that significant economies of scale will be achieved through the simultaneous use of two drilling vessels. ROC's incremental net cost for the exploration and appraisal programme is well within the Company's funding capacity and estimates for ROC’s total exploration expenditure set out in the Prospectus. A revised 2004 Drilling Programme is attached (Attachment 1).

2. Blocks H15 and H16 (collectively “Block H”) deepwater Rio Muni Basin, offshore Equatorial Guinea (ROC: 35% and Technical Manager)

ROC intends to use (Attachment 2) of this ASX release as part of corporate presentations which ROC may undertake in the future. This will be the only part of the proposed presentations that is not already in the public domain.
The main point to note with regard to Attachment 2 is that within a radius of 23 kilometres from the proposed Bravo-1 exploration well location there are 12 other potential prospects and leads which could be considered for drilling in the event that Bravo-1 is a discovery.

Further information regarding the Bravo-1 well can be found in ROC’s Prospectus dated 2 April 2004.

3. WA-226-P, offshore Perth Basin (ROC: 7.5%)

Although the drilling schedule for WA-226-P is yet to be finalised, ROC now considers that the next well in the permit, the Fiddich-1 exploration well, is more likely to be drilled in 4Q 2004 than during 2Q 2004, which was the possible date indicated in ROC’s ASX Release dated 15 March 2004.

Bruce Clement
Chief Operating Officer
E-mail: bclement@rocoil.com.au

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KEY POINT

· Preliminary interpretation of wireline logs from the Wei-12-7-1 well, Block 22/12 in the Beibu Gulf, offshore China, indicate that the well is likely to be plugged and abandoned as a dry hole with oil shows, subject to pressure data which is currently being gathered confirming this interpretation.

ROC, for and on behalf of the Block 22/12 Joint Venture, hereby advises that the Wei-12-7-1 has reached a Total Depth of 1,795 metres in basement. Within the Basal part of the main reservoir objective, the Weizhou formation, and within the deeper secondary objective, the Liushagang formation, good quality oil shows were observed although preliminary interpretation of wireline logging indicates these intervals are likely to be water bearing. Wireline logging operations, specifically the gathering of pressure gradient data, will be completed today and, subject to that information confirming the preliminary log interpretation, it is expected that the well will be plugged and abandoned as a dry hole with oil shows. After the Nanhai IV rig has been released from the Wei 12-7-1 location it will move to drill the Wei 12-8-3 appraisal well, which is approximately eight kilometres to the east. The Wei 12-8-2 discovery is estimated to have the potential to contain recoverable proved and probable reserves in the order of 20 mmbo, subject to successful appraisal drilling.

The Block 22/12 Joint Venture consists of:
Roc Oil (China) Company 40% and Operator
Horizon Oil Limited 30%
Petsec Energy Limited 25%
Oil Australia Pty Limited * 5%

* a wholly owned subsidiary of First Australian Resources

Please note that in the event of a commercial development within Block 22/12 the interests held by the current joint venturers may reduce on a pro-rata basis by up to 51%, assuming that the China National Offshore Oil Corporation ("CNOOC") exercises its right to participate up to a 51% equity level in the development.

Commenting on the results of the Wei 12-7-1 well, ROC's Chief Executive Officer, Dr John Doran, stated that:

"Assuming the pressure gradient data confirms the preliminary log interpretation it seems that what we have drilled at the base of the main reservoir objective includes a 30 metre sandy section with oil and gas shows which could be interpreted as indicating a possible oil accumulation up dip. Even if this proved to be the case, the size of such an accumulation means that is unlikely to be of immediate commercial interest."

Bruce Clement
Chief Operating Officer
E-mail: bclement@rocoil.com.au

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ROC OIL COMPANY ANNUAL REPORT 2003

In order to view the Roc Oil Company Annual Report for 2003 (including full Financial Statements) please click here (5 Mb download - may take 30 seconds on high speed connection, or up to 10 minutes on 56K modem)

In order to view the 2003 Proxy Form, please click here

Bruce Clement
Chief Operating Officer
E-mail: bclement@rocoil.com.au

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KEY POINTS

· On 13 April 2004, the Nanhai IV jack-up drilling rig commenced drilling the Wei 12-7-1 exploration well in Block 22/12 in the Beibu Gulf, offshore China. The well, the first in a series of two to five wells, is expected to take up to ten days from commencement of drilling to rig release.

BLOCK 22/12, BEIBU GULF, OFFHORE CHINA, (ROC: 40% and Operator)

On 13 April 2004 the Wei 12-7-1 exploration well started drilling in approximately 30 metres of water, two kilometres north of the Wei 12-8-1 discovery well (Attachment 1).

The well is expected to take up to ten days to drill, log and evaluate to a Total Depth of approximately 1,700 metres, prior to plugging and abandonment - which will be undertaken regardless of the results of the well - and rig release. The Wei 12-7 Prospect is estimated to have a mean unrisked proved and probable reserve potential of 43 mmbo.

Unless there are operational problems which would cause the drilling to be more prolonged than anticipated, ROC does not intend to release further information about the well until a preliminary interpretation of the wireline logs over the zone/s of interest is available, probably in a week's time. This is because, in this part of the Beibu Gulf, the reporting of "oil shows" observed while drilling, prior to the interpretation of wireline logs, is not particularly meaningful.

Wei 12-7-1 will be followed immediately by Wei 12-8-3, an appraisal of the Wei 12-8-2 field, which is also expected to take about 10 days from commencement of drilling to rig release. The Wei 12-8-2 discovery is estimated to have the potential to contain recoverable proved and probable reserves in the order of 20 mmbo, subject to successful appraisal drilling.

In the event of success with one or both of the first two wells, the planned appraisal and exploration programme will be expanded to include up to three additional wells to be drilled in 2004.

The Block 22/12 Joint Venture consists of:

Roc Oil (China) Company . . . . 40% and Operator
Horizon Oil Limited . . . . . . . . .30%
Petsec Energy Limited . . . . . . 25%
Oil Australia Pty Limited * . . . .5%

* a wholly owned subsidiary of First Australian Resources

Please note that in the event of a commercial development within Block 22/12 the interests held by the current joint venturers may reduce on a pro-rata basis by up to 51%, assuming that the China National Offshore Oil Corporation ("CNOOC") exercises its right to participate up to a 51% equity level in the development.

Bruce Clement
Chief Operating Officer
E-mail: bclement@rocoil.com.au

Return to ASX Releases main page

KEY POINTS

· According to the latest information received by ROC, the Nanhai IV jackup is expected to commence operations at the Wei 12-7-1 well location in Block 22/12 in the Beibu Gulf, offshore China, within several days, as envisaged in the recently released Prospectus for ROC's renounceable rights issue.

· ROC, as Technical Manager of Blocks H15 and H16 (collectively "Block H") in the deepwater Rio Muni Basin, offshore Equatorial Guinea, has contracted the "Sedco Energy" dynamically positioned semi submersible, to drill the Bravo-1 exploration well which is expected to commence during June/ July 2004, as envisaged in the recently released Prospectus for ROC's renounceable rights issue.

1. BLOCK 22/12, BEIBU GULF, OFFSHORE CHINA (ROC: 40% & Operator)

The Nanhai IV drilling rig, which has been contracted to drill two to five wells for the Block 22/12 Joint Venture, is expected to complete its current operations for a third party within the next few days, after which it will immediately commence work for ROC on the Wei 12-7-1 exploration well.

2. BLOCK H, RIO MUNI BASIN, OFFSHORE EQUATORIAL GUINEA (ROC 35% & Technical Manager)

ROC, as Technical Manager for and on behalf of the Block H Joint Venture, has contracted the "Sedco Energy", a fifth generation, dynamically positioned, semi submersible, to drill the Bravo-1 exploration well in the deepwater Rio Muni Basin, offshore Equatorial Guinea.

The well, which is expected to start drilling in June/July 2004 in approximately 1,500 metres of water, is about 180 km southeast of Malabo, the capital of Equatorial Guinea and approximately 65 km north of the Amerada Hess-operated oil fields in Block G.

Bravo-1 will target Tertiary channel sands with a mean recoverable reserve estimate of 116 MMBO. Currently, ROC is scheduled to pay 70% of the cost of Bravo–1 as the final stage of its farmin to Block H and 35% of ongoing costs thereafter. As part of normal industry risk mitigation procedures, ROC may consider farming out part of its interest in Equatorial Guinea, subject to relevant commercial considerations, as mentioned in the recently released Prospectus for ROC's renounceable rights issue.

Bruce Clement
Chief Operating Officer
E-mail: bclement@rocoil.com.au

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In order to view Letter(s) to all Shareholders, from the ROC Company Secretay, click here.

Bruce Clement
Chief Operating Officer
E-mail: bclement@rocoil.com.au

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Details of the Rights Issue and Associated Information

In order to view the Rights Issue, click here.

In order to view the application for quotation of additional securities and agreement (Appendix 3B) click here.

To view the Rights Issue - Investor Presentation, click here.

Bruce Clement
Chief Operating Officer
E-mail: bclement@rocoil.com.au

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KEY POINTS

· ROC will undertake a pro rata renounceable 3 for 5 Rights Issue ("the Issue") of 66 million Ordinary Shares at $1.40; a 26% discount to the closing price of the shares on the most recent trading day, 30 March, 2004 and an 18% discount to the weighted average share price for the preceding three months.

· The Issue, which will raise $92.3 million gross and is fully underwritten by Goldman Sachs JBWere Pty Ltd, is pursuant to a prospectus dated 2 April 2004 ("Prospectus"). Subsequent to the capital raising ROC will have 175.9 million shares on issue.

· The primary purpose of the Issue is to assist in funding the development of ROC's assets in Western Australia and Mauritania, the appraisal and possible development of its fields offshore China and to allow the Company to continue its exploration and appraisal programmes in Mauritania as well as its exploration activities in Equatorial Guinea and Angola.

Details of the Rights Issue

ROC is pleased to announce a pro rata 3 for 5 renounceable Rights Issue of 66 million Ordinary Shares, to virtually all shareholders, to raise gross proceeds of $92.3 million; $88.1 million after issue costs. Subsequent to the capital raising, ROC will have 175.9 million shares on issue.

The Issue is fully underwritten by Goldman Sachs JBWere Pty Ltd. Patersons Securities Limited will act as co-manager of the Rights Issue.
ROC's Board of Directors carefully considered various alternatives for raising funds from the investment community and chose the one which provides virtually all of ROC's shareholders with an equal opportunity to participate in the Offer.

The purpose of the Issue is to assist in funding the development of ROC's assets in Western Australia and Mauritania, the potential development of its fields offshore China and to allow the Company to continue its exploration and appraisal programmes in Mauritania and exploration activities in Equatorial Guinea and Angola.

All shareholders with registered addresses in Australia and New Zealand will be offered 3 New Shares for every 5 existing Ordinary Shares that they hold on 14 April 2004. The New Shares will be issued at $1.40 per Share, a discount of about 26% to ROC's closing market price of $1.90 on Tuesday 30 March 2004 and 18% to the weighted average share price for the preceding three months. The New Shares will rank equally with the existing Ordinary Shares of ROC.

Since ROC became a publicly-listed company in 1999, it has been characterised by a high level of self funded activity which has generated exploration, appraisal and development success. During this time the Company's portfolio has changed markedly, most notably through the addition of new interests in West Africa, China, Australia and New Zealand.

One feature which has remained constant is ROC's adherence to its sensibly contrary, strategy which seeks to create value through the application of modern technology to assets which have been overlooked and/or undervalued. ROC believes that it is now poised to capitalise on this strategy. Highlights of ROC's track record during the last five years include:

· In 1999, when ROC acquired the then undeveloped Saltfleetby Gas Field it was thought to contain 43 bcf of proved and probable (2P) recoverable gas reserves. Since ROC brought the field on to production in December 1999, there has been almost a 110% increase in 2P gas reserves with approximately 50 bcf produced and an estimated 40 bcf yet to be produced.

· ROC's UK portfolio, acquired in 1999 for approximately $120 million, including fees, has generated approximately $300 million in production sales revenue, $200 million in cash flow from operations and $100 million from the sale of non-core assets. During the same period the Company has reduced its debt from $71 million as at 31 December 1999 to $18 million.

· ROC's first exploration wells in Mauritania, Australia and China, all discovered potentially commercial oil. In the first two countries ROC acquired its initial interests prior to the first discoveries being made in the region.

ROC's intention is to apply the majority of the funds raised from the Issue, in conjunction with other sources of funding including existing cash reserves, debt finance and funds from operations, to the following areas:

Potential Development of the Cliff Head Oil Field, offshore Western Australia

ROC owns a 37.5% interest in, and is operator of, the Cliff Head Oil Field, in the Perth Basin, offshore Western Australia. The field was declared commercial-in-principle in October 2003: a "first" for the offshore Perth Basin. A final investment decision ("FID") is expected to be made in the third quarter of 2004. If developed, Cliff Head will establish the offshore Perth Basin as Australia's fourth offshore oil producing area after the Bass Strait, North West Shelf and Timor Sea. First oil production could commence in the fourth quarter of 2005.

Development of this field is expected to provide ROC with additional 2P oil reserves of approximately 8.2 mmbbl. According to Resource Investment Strategy Consultants Pty Ltd ("RISC"), the Independent Expert, whose report is included as an Annexure to the Prospectus, ROC's share of the estimated cost of this development is expected to be to be about $59 million, subject to the completion of Front End Engineering and Design Studies ("FEED"), which are currently underway, approval of the final scope of the project and FID.

Potential Development of Chinguetti Oil Field, offshore Mauritania

ROC owns a 3.693% interest in the Chinguetti Oil Field, offshore Mauritania. The field was declared commercial-in-principle in January 2004, a notable “first” for Mauritania. A FID is expected to be made in the second quarter of 2004. First oil production could commence by the end of 2005. Development of this field is expected to provide ROC with additional 2P oil reserves of approximately 4.5 mmbbl. ROC's share of the estimated cost of this development is expected to be about $24 million. After including funding commitments for the leased Floating Production, Storage and Offloading Vessel ("FPSO"), ROC estimates its share of total funding requirements to be about $32 million.

Appraisal and Potential Development of oil fields in Block 22/12, offshore China

ROC owns a 40% interest in, and is operator of the Block 22/12 Production Sharing Contract, in the Beibu Gulf, offshore China. ROC plans to undertake an exploration and appraisal drilling programme in April and May 2004 in order to determine the commercial potential of one or more oil fields in the area. If a development proceeds, first oil production could commence by mid 2006. The fields are expected to provide ROC with additional 2P oil reserves of about 5.8 mmbbl. ROC's share of the estimated cost of developing the Block 22/12 fields is expected to be about $36 million. After including the planned exploration and appraisal programme, ROC estimates its share of the cost for the potential project to be about $42 million.

Exploration and Appraisal in West Africa; specifically Mauritania, Equatorial Guinea and Angola

In addition to the development and appraisal opportunities referred to above, ROC may utilise a portion of the funds raised to explore and appraise its acreage in deep water Mauritania, including the Tiof/Tiof West Oil Field, deep water Equatorial Guinea and onshore Angola. ROC believes that all three areas have the potential to add significant value to ROC's production and development portfolio.

Use of funds raised in the Rights Issue

As noted above, the purpose of the Issue is to raise funds to assist ROC to progress its key development and appraisal projects and pursue its West African exploration initiatives. Based on ROC's current estimates of project expenditure, the Company presently intends to apply the funds raised as follows:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A$m
Development of Cliff Head Oil Field, Western Australia
Chinguetti Oil Field, Mauritania . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.0

Beibu Gulf Oil Field in China including appraisal, exploration
and potential development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.0

Exploration and appraisal in Mauritania, including the Tiof/
Tiof West Field, exploration in Equatorial Guinea and Angola . . . . . . . . 18.1

Expenses of the Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.2

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92.3

Further details

A Prospectus published by the Company and an Investor Presentation containing further details of the Rights Issue will be posted to the ASX on Friday 2 April 2004.


Commenting upon the capital raising, ROC's Chief Executive Officer, Dr John Doran, said that:

"Looking around the Australian oil industry, it is very tempting to conclude that something has changed, it now seems that it is good to be global.

Clearly, investors in Australia have a real interest in gaining access to the international oil patch which lies north of Darwin and west of Perth.

The timing of the Rights Issue is influenced by the coincidence that, after more than four years consistently implementing our ‘sensibly contrary’ strategy, all these various projects are coming together at the same time."

In order to view the Renounceable Rights Issue, click here

Bruce Clement
Chief Operating Officer
E-mail: bclement@rocoil.com.au

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