| AUGUST 2004 - RELEASES |
| BLOCK 22/12, BEIBU GULF, OFFSHORE CHINA – UPDATE (31-08-2004) |
POST-DRILL ANALYSES HIGHLIGHT ADDITIONAL EXPLORATION POTENTIAL AND CONFIRM LARGER IN-PLACE OIL ACCUMULATION KEY POINTS • Analysis of data gathered during 2Q 2004 from the drilling of three wells in Block 22/12 (“the Block”) in the Beibu Gulf, offshore China, indicate a cluster of exploration targets in the vicinity of the 6-12-1 oil discovery well in the northern part of the Block. The collective, unrisked, potential for these prospects is estimated to be 40 to 50 MMBO recoverable. • The data also confirm the highly viscous nature of the oil contained in the 12-8 East Field in the southern part of the Block. However, ROC’s post-drill analyses further indicate that the total oil in-place in this field and the adjacent 12-8 West Field, is approximately 50% more than the independently calculated pre-drill estimate of 119 MMBO. • On the basis of these new technical insights, and the strong forward oil price curve, ROC and its co-venturers expect to enter into discussions with the relevant Government authorities in China regarding further drilling and pre-development studies in the Block.
Between mid-April and mid-May 2004 ROC operated, on behalf of the Block 22/12 Joint Venture, three exploration and appraisal wells in and around the 12-8 West and 12-8 East oil fields in the southern part of the Block, which is located in the Beibu Gulf, offshore China (Attachment 1). As reported at the time, initial results were disappointing: only one well encountered a significant oil column and that oil proved to be highly viscous. However, intensive post-drill studies conducted during the last several months have indicated that other aspects of the drilling results encourage a more positive view of the petroleum potential of the Block. Specifically: • It now appears that the total amount of in-place oil reservoired in the 12-8 West and 12-8 East fields is approximately 50% greater than the 119 MMBO in-place estimate contained in the Independent Expert’s Report included in ROC’s Prospectus published in association with the Company’s Rights Issue announced on 2 April 2004. In light of post well analysis and the recent strengthening of forward curve oil prices, the Joint Venture believes that potential commercial development of the 12-8 East and 12-8 West oil fields clearly merits further investigation, notwithstanding the highly viscous nature of the oil. • The results of the 2Q 2004 drilling programme also provided, for the first time, information which allows the 3-D seismic data to be calibrated with well data. As a result of integrating this information into the geological model, it now appears that there is a cluster of prospects in the northern part of the Block (Attachment 1). These prospects are in the vicinity of the Wei 6-12-1 discovery, which was made by the Joint Venture in March 2002 and which confirmed that the oil in this part of the Block is significantly less viscous than that found in the 12-8 East Field. Based on 3-D seismic, supported by amplitude and AVO anomalies, this cluster of prospects is currently estimated to have an unrisked recoverable reserve potential in the order of 40 to 50 MMBO. The proximity of this cluster of prospects to existing infrastructure encourages the view that this part of the Block warrants further exploration (Attachment 1).
Roc Oil (China) Company .........40% and Operator
Commenting on the latest developments in Block 22/12, ROC’s Chief Executive Officer, Dr John Doran, stated that: “Overall, the block now looks a lot better than it did immediately after we completed our drilling programme three months ago. Then the most obvious thing staring us in the face was the highly viscous nature of the oil in the 12-8 East Field. That was seen then – and is still seen now – as an unwelcomed complication to potential field development. However, the substantially larger volume of in-place oil now recognised in the southern part of the Block, combined with strong forward oil price curves, have gone some way towards mitigating the negative implication of the high viscosity. |
| SUMMARY OF ROC’S FINANCIAL RESULTS FOR FIRST HALF 2004 (“1H2004”) (27-08-2004) |
SUMMARY The half year was characterised by a subdued operating result, reflecting down time at the Saltfleetby Gas Field and the increasing maturity of that field; a strengthened balance sheet following the successful A$92 million Rights Issue; a declaration of commerciality for Mauritania’s first offshore field development and a successful debut as a deep water drilling operator offshore West Africa – and also by exploration drilling results that were generally disappointing. A record cash level of $120 million and a very modest debt level, subsequently reduced to zero, are arguably more important than a $16 million drop in profit after tax, largely due to a $15 million, non-cash, write off of exploration expenditure in the South Humber Basin, onshore UK, and the effect of temporary mechanical problems at the third party owned facilities which receive the Company’s gas production.
120 million cash assets
Commenting on the results, ROC’s Chief Executive Officer, Dr John Doran stated that “The detailed operating results are as foreshadowed by ROC’s recent ASX releases. The overall result is lower, mainly because of the mechanical problems that occurred at the third party-owned Theddlethorpe gas processing facility earlier this year and the subsequently subdued production. The Saltfleetby Gas Field is moving into a more mature phase with an attendant need to work over wells, redrill wells and/or drill infill wells to more efficiently access the 37 BCF remaining gas reserves. ROC has an active exploration and appraisal drilling programme planned for onshore UK consisting of at least two, and, perhaps, as many as four wells. However, because none of the exploration component of this programme is located in the South Humber Basin, and most of the licences in that basin are nearing relinquishment, the Company has chosen to write-down A$15 million of exploration expenditure in relation to its past acquisition and exploration costs in the basin. This write-down has had an obviously negative, albeit non-cash, effect on the half year results. The Company is in good shape with very substantial net cash reserve, an active exploration drilling programme and a scheduled increase in its production revenue which is expected to kick in within the next 18 months as the Company benefits from the development of the Chinguetti Oil Field, offshore Mauritania and the anticipated development of the Cliff Head Oil Field, offshore Western Australia. ROC’s $100 million net cash assets provides the Company with a strong financial base to fund these developments and the planned exploration and appraisal drilling programmes.”
To view the full Directors’ Report and Financial Report for the Financial Half Year Ended 30 June 2004, click here
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| ROC AGREES TO INCREASE ITS INTEREST IN THE CABINDA SOUTH BLOCK, ONSHORE ANGOLA AND TO MOVE TOWARDS TRIGGERING THE PRODUCTION SHARING AGREEMENT (26-08-2004) |
KEY POINTS • ROC expects to trigger the Production Sharing Agreement (“PSA”) for the Cabinda South Block, onshore Angola, within the next two months. In a separate, but related, move, ROC has also agreed to acquire an additional 20% interest in the PSA from its co-venturer Force Petroleum. Both events are subject to receipt of Government approvals. During a recent visit to Angola by senior ROC Board members and executives, the Company confirmed its intention to move towards triggering the Cabinda South Block PSA. Subject to receipt of relevant Government approvals, ROC expects the PSA to be triggered within two months. In a separate, but related, move, which is also subject to Government approval, ROC has agreed to acquire an additional 20% Working Interest (25% Contributing Interest) in the PSA from current co-venturer Force Petroleum. Subsequent to this transaction being completed, ROC will be the only non-Government participant in the Cabinda South Block with an 80% Working Interest (100% Contributing Interest). The Angolan national oil company, Sociedade Nacional de Combustíveis de Angola ("Sonangol"), will hold the other 20% Working Interest. The consideration to be paid by ROC to Force includes an upfront cash payment and a consideration for past costs, together with the provision of a 3% (out of 20%) Net Profit Interest. Commenting on the most recent developments relating to the Cabinda South Block, ROC’s Chief Executive Officer, Dr John Doran, stated that: “Because last week’s visit to Angola by senior ROC officials was very constructive and encouraging it is appropriate and timely to advise ROC shareholders of the Company’s firm intention to increase its interest in the Cabinda South Block and, more importantly, to commence exploration on the ground in early 2005, after a 32 year period of industry inactivity.”
Bruce Clement
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| ROC TO LIST IN LONDON NEXT MONTH (06-08-2004) |
Bruce Clement
To view London Stock Exchange (AIM) documentation, via ROC's Corporate page, click here <scroll to bottom of page> Return to ASX Releases main page
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| DEBT REPAYMENT (03-08-2004) |
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