| JANUARY 2004 - RELEASES |
| ACTIVITIES FOR THE QUARTER ENDED 31 DECEMBER 2003 (31-01-2004) |
To view the Quarterly Report for quarter ending 31 December 2003, click here |
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SALTFLEETBY
GAS FIELD, ONSHORE UK: |
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KEY POINTS • Independent engineering company, Helix RDS (“HRDS”), has completed its end-2003 reserve review of the 100% ROC-owned and operated, Saltfleetby Gas Field, onshore UK. Original Proved plus Probable (2P) recoverable sales gas reserves are estimated to be 90 BCF, up 1 BCF on the previous year-end estimate. • Total field production, from start-up in late-1999 to end-2003, approximates to 49 BCF, with remaining 2P gas reserves estimated by HRDS to be 41 BCF, most of which will be produced during the next five to ten years. • During 2003 the Saltfleetby Gas Field produced approximately 5% less gas than during 2002, largely due to natural field decline.
1.
SALTFLEETBY GAS FIELD RESERVES ESTIMATE FOR END-2003 • Original Proved and Probable (2P) recoverable sales gas reserves are 90 BCF, up 1 BCF (1.1%) from 89 BCF at end-2002. • After taking into account 49 BCF produced to end-2003, remaining 2P recoverable sales gas reserves are estimated to be 41 BCF, most of which will be produced during the next five to ten years. • Original 2P recoverable condensate reserves estimate is 1.26 MMB, also up slightly from end-2002. • After taking into account production to end-2003, remaining 2P recoverable condensate reserves are estimated to be 0.42 MMB.
Gas production
for calendar 2003 was 9.6 BCF, 0.5 BCF (5%) down on the previous year,
largely due to natural field decline. Condensate production for calendar
2003 was 0.15 MMB, unchanged from the previous year.
After four years of production, the Saltfleetby Gas Field continues to perform in a very satisfactory manner. The very slight increase in the original 2P recoverable sales gas reserve estimate at end 2003, compared to the equivalent estimate made at the end of 2002, is not particularly relevant because it lies well within the margin of normal industry error. Perhaps, the more compelling statistic is that, prior to ROC bringing the field onto production at the end of 1999, the 2P recoverable gas reserve estimate was about 43 BCF. This stands in sharp contrast to the fact that, after producing 49 BCF in four years, the field still has 41 BCF left to produce over the next five to ten years. That production schedule should overlap quite nicely with the anticipated start-up of production from ROC’s oilfields offshore Mauritania and Western Australia: Chinguetti and Cliff Head
2.
CURRENT OPERATIONS AT SALTFLEETBY As previously reported, the Saltfleetby-5 and the Saltfleetby-7 wells are planned to be worked over in order to rectify suspected mechanical problems, which have caused those wells to under perform expectations. In this context, it is important to note that there are now seven wells in the Saltfleetby Gas Field and the field is continuing to produce at approximately 22 MMSCFD from five wells, including Saltfleetby-6 which is intermittently brought back on to production as and when appropriate. Within the industry it is quite normal for a gasfield, that has been producing for more than four years with negligible down time, to require some of the producing wells to be routinely worked over to rectify mechanical problems which, inevitably, arise from time to time. Coiled tubing operations started at Saltfleetby-5 on 28 January 2004 and quickly confirmed the mechanical nature of the problem: the downhole plugs which had been placed in the well in August 2002, to isolate the main gas reservoir from the underlying water bearing section, had dislodged, thereby allowing water to come up the cased hole. On this basis, ROC intends to mobilise its Explorer Rig to complete the workover of Saltfleetby-5 during February 2004. Saltfleetby-7 is also likely to be worked over, possibly during February 2004 in an attempt to identify, and hopefully, rectify, suspected mechanical problems which caused the well to under perform expectations.
One of the good things about operating onshore UK is that when wells experience mechanical difficulties – and, sooner or later, most wells do – you can get to grips with the problem quickly. It is certainly a lot easier to back a truck up to a well at Saltfleetby than to have a work boat waiting for a suitable weather window in the North Sea – and it always helps if you can do the workover with your own rig.
Bruce
Clement Return to ASX Releases main page
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| DRILLING ACTIVITY UPDATE: (27-01-2004) |
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KEY POINTS • The Old Hills-1 exploration well, onshore UK, is being plugged and abandoned as a sub-commercial oil discovery. • Saltfleetby-5 and Saltfleetby-7 in the Saltfleetby Gas Field onshore UK, are to be worked-over due to possible mechanical problems. • The multiwell drilling programme offshore China is expected to start in mid-February 2004, due to the designated rig being delayed on its current operation for a third party.
1.
ONSHORE UK 1.1 Old
Hills-1: Exploration Well, PEDL003, Onshore UK (ROC: 100% & Operator) Since the last drilling report (ROC’s Release to ASX dated 20 January, 2004) the Old Hills-1 exploration well, approximately 30 km southeast of Nottingham in the English Midlands, has drilled to a Total Depth of 1,315 metres and wireline logging has been completed. No further significant hydrocarbon shows were encountered below those in the Chatsworth Grit referred to in last week’s ASX Release. Electric logs run at Total Depth showed no hydrocarbon intervals capable of sustained commercial production. Part of the previously reported 5 metres of oil shows in the Chatsworth Grit is interpreted as being potentially producible but the associated reserve did not meet ROC’s commercial thresholds. The well
will be plugged and abandoned as a sub-commerical oil discovery.
Following
completion of operations at Old Hills-1, the ROC Explorer rig will be
stacked pending further exploration and development drilling later in
the year, subsequent to the receipt of planning consents currently expected
to be received in 2Q04. 1.3 Saltfleetby Gas Field, Onshore UK (ROC: 100% & Operator) On 21 January the Saltfleetby-5 well, which had been producing gas at a rate of approximately 3 MMSCF per day, ceased production following a rapid rise in water production. The source of the problem may relate to a mechanical failure of the inflatable plugs, set in casing below the main gas reservoir in August 2002, to isolate the deeper water-producing Namurian interval. If this is the case, it may be possible to restore the integrity of the isolation through a work-over operation, using coiled tubing. This operation is expected to start before the end of January, 2004 and to be completed during early February, 2004. The Saltfleetby-7 well, which was completed for production in December 2003 and flowed approximately 2.5 MMSCF per day during a short clean-up flow, has been hooked up for permanent production. When it was brought on to production the well under-performed against expectations and will be worked over during February with the aim of establishing production in the order of the 2 to 3 MMSCF per day as in accordance with the potential indicated by the clean-up flow. In the absence of Saltfleetby-5 and Saltfleetby-7, the Saltfleetby Field is continuing to produce gas at about 20 MMSCF per day.
2. BLOCK 22/12, BEIBU GULF, OFFSHORE CHINA, (ROC: 40% & Operator) ROC has been advised that the Nanhai IV drilling rig is expected to be released from its current operations during the first half of February 2004. Therefore, the Wei 12-7-1 exploration well, the first of at least two and, perhaps, as many as five, back-to-back wells scheduled to be drilled in Block 22/12 during the first quarter of 2004, is now expected to start drilling in mid-February 2004.
Bruce
Clement Return to ASX Releases main page
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| DRILLING ACTIVITY UPDATE: (20-01-2004) |
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KEY POINTS • The Old Hills-1 exploration well, onshore UK, is currently drilling ahead at 861 metres. • The multiwell drilling programme offshore China and is not expected to start before end January 2004, due to the designated rig being delayed on its current operation for a third party.
1.
OLD HILLS-1: EXPLORATION WELL, PEDL003, ONSHORE UK (ROC: 100% & Operator) The first target horizon, the Chatsworth Grit, was encountered at 822 metres and good oil shows were observed over a net five metre interval. An evaluation of the potential reservoir will be carried out when the well is logged after reaching its prognosed Total Depth of 1,290 metres, probably during next week. Commenting on the preliminary drilling results from Old Hills-1, ROC’s Chief Executive Officer, Dr John Doran, stated: “Its always tempting to describe oil shows in an exploration well as “encouraging” but the reality is that until you run wire line logs there is no way of telling whether the shows relate to a producible oil reservoir or simply reflect a rock which contains immoveable, residual oil. Therefore there is no point in trying to comment on the possible commercial significance of the oil shows in Old Hills-1 until we have acquired and analysed the logs”.
2. BLOCK 22/12, BEIBU GULF, OFFSHORE CHINA, (ROC: 40% & Operator)
The Wei 12-7-1 exploration well, in 30 metres of water approximately 2 km north of the Wei 12-8-1 discovery well, is expected to take about 10 days to drill, log and evaluate to a Total Depth of approximately 1,700 metres. The Wei 12-7 Prospect is estimated to have the potential to contain recoverable reserves of several tens of millions of barrels. Wei 12-7-1 will be followed immediately by Wei 12-8-3, an appraisal well of the Wei 12-8 oil accumulation and it is also expected to take about 10 days to drill. Wei 12-8 is estimated to have the potential to contain recoverable reserves of between 20 and 30 MMBO, subject to successful appraisal drilling. Subject to the results of the first two wells, the Block 22/12 Joint Venture has made provision to drill up to three more back-to-back wells as part of the current drilling programme. If the third well is drilled, the continuous drilling programme is expected to extend into March 2004. In order for the fourth and fifth wells in the programme to be drilled, the results of the first three wells would have to be very compelling, and, in such circumstances, ROC and its co-venturers would not expect to complete the continuous drilling programme until April, 2004.
The Block
22/12 Joint Venture consists of: Roc Oil (China)
Company . . . . 40% and Operator
Bruce
Clement Return to ASX Releases main page
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| ACTIVITY UPDATE: (13-01-2004) |
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KEY POINTS · The Old Hills-1 exploration well, onshore UK, commenced drilling on 7 January 2004, and is currently drilling ahead at 380 metres. OLD HILLS-1:
EXPLORATION WELL, PEDL003, ONSHORE UK (ROC: 100% & Operator) The Old Hills-1 well, which is targeting a 2 to 3 MMBO oil prospect, is expected to reach the first target horizon within the next week. Bruce
Clement Return to ASX Releases main page
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| ACTIVITY UPDATE: (06-01-2004) |
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• The Chinguetti Oil Field, offshore Mauritania, has been declared commercial by the Joint Venture.
The field, which is approximately 80 km southwest of the Mauritanian capital, Nouakchott, is in approximately 800 metres of water and was discovered in May 2001 with the Joint Venture’s first well in this large, relatively unexplored, frontier region. Since then, three appraisal and/or development wells have been drilled on the structure, all of which also encountered oil. Two of the wells were tested with flow rates ranging up to 15,680 barrels of oil per day (BOPD). It is expected that Chinguetti will not only be commercial in its own right but may also serve as a potential development focus for other fields which have been discovered within a 30 km radius during the last 18 months, thereby allowing the Joint Venture to build a sustainable business in this part of Africa. Woodside Mauritania Pty Limited, operator of the Chinguetti Development, has advised that first oil is expected to flow from Chinguetti in late 2005/early 2006 and that initial flow rates are anticipated to be in the order of 70,000 BOPD. In December 2003, the participants in the Chinguetti Joint Venture announced that they had agreed to acquire, on a pro-rata basis, the 35% interest of Agip Mauritania BV (“Agip”) in Production Sharing Contract (“PSC”) A, which covers part of the Banda Field, and the adjacent PSC B, which covers the Chinguetti and Tiof/Tiof West fields as well as part of the Banda Field. Subsequently, ROC announced that a considerable part of its net A$4.8 million/US$3.6 million share of the cost of this transaction will be covered by the proceeds of the sale of non-operated, undeveloped, acreage in and around the Ettrick Field in the UK North Sea. Following the transaction with Agip, ROC’s equity will increase from 2.7% to 4.155% in PSC A and from 2.4% to 3.693% in PSC B. Commenting on the Declaration of Commerciality at Chinguetti, ROC’s Chief Executive Officer, Dr John Doran stated: “There is always a bit of a buzz when you declare a discovery to be commercial - even if the inference of commerciality has been in the market place for a little while - but the buzz is a lot bigger when it relates to a largely unexplored frontier area in a country currently without any oil production.”
2. CLIFF HEAD OIL FIELD, OFFSHORE PERTH BASIN, WESTERN AUSTRALIA (ROC 37.5% & OPERATOR) Following an ASX announcement by Norwest Energy NL (“Norwest”) on 2 January 2004, the composition of the Joint Venture undertaking the Front End Engineering and Development review of the Cliff Head Oil Field may change. According to Norwest, it has entered into a conditional Memorandum of Understanding to sell its 5% interest in the WA-286-P Exploration Permit, which contains the Cliff Head Oil Field, to ITOCHU Oil Exploration Co., Ltd (“Itochu”) for a cash consideration of A$8.1 million, plus a 2% Overriding Royalty on production from the field in excess of 28 MMBO. This proposed transaction, between two third parties, implies a cash value of approximately A$61 million for ROC’s 37.5% interest in the area. Commenting on the transaction ROC’s Chief Executive Officer, Dr John Doran, stated: “We understand the company-specific rationale behind Norwest’s proposed sale and ROC wishes Norwest every success in the future as it seeks to monetise its interest in the Cliff Head Oil Field and restructure its asset base. At the same time, if the conditions of the MOU are met, we would extend a warm welcome to Itochu which will bring its own unique corporate strengths to the Cliff Head Joint Venture.”
3.
OLD HILLS-1: EXPLORATION WELL, PEDL003, ONSHORE UK (ROC: 100% & Operator) The ROC Explorer drilling rig is fully rigged up at the Old Hills-1 exploration well site, located in PEDL003, approximately 30 km southeast of Nottingham in the English Midlands. The well is expected to commence drilling on 6 January 2004. Subject to drilling results, the Old Hills-1 well, which is targeting a 2 to 3 MMBO oil prospect, is expected to take approximately one month to drill.
4.
BLOCK 22/12, BEIBU GULF, OFFHORE CHINA, (ROC: 40% & Operator) 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 |