KEY POINTS
· The Bravo-1 deep water wildcat exploration well in the Rio Muni Basin, offshore Equatorial Guinea, West Africa, has reached a Total Depth of 3,222 mBRT (metres below rotary table) and preparations are underway to plug and abandon the well as a dry hole.
BLOCKS H15 & H16 (COLLECTIVELY “BLOCK H”), OFFSHORE EQUATORIAL GUINEA, WEST AFRICA (ROC: 15% FREE CARRIED & TECHNICAL MANAGER)
Since ROC’s last ASX release dated 15 June 2004, the 9 5/8 inch casing was set at 2,905 mBRT and intermediate logs were run at that depth before the well drilled on in 8 ½ inch hole to a Total Depth of 3,222 mBRT and the final suite of wireline logs run.
At 23:00hrs, local time, 20 June 2004, the current operation was preparing to plug and abandon the well as a dry hole based on the preliminary analysis of drill and log data. Rig release is expected to occur later this week.
Bravo-1 started drilling on 6 June 2004, in 1,509 metres of water 180 km southeast of Malabo, the capital of Equatorial Guinea, West Africa. The well was drilled by the Sedco Energy, a fifth generation, dynamically positioned, drilling vessel with ROC managing the operation.
Subsequent to the Pioneer Natural Resources Limited (“Pioneer”) acquisition of 20% interest in Block H from ROC, subject to Government approval (detailed in ROC’s ASX Release dated 7 June 2004) Pioneer has also acquired, subject to Government approval, an additional 20% from the Atlas Group. Therefore, the Block H Joint Venture will consist of: Pioneer (40%); The Atlas Group (Operator 1 & 25%); Sasol Petroleum International (Pty) Ltd (20%); and ROC (Technical Manager 2 & 15%) with Pioneer expected to acquire the Technical Manager’s role later in 2004.
Commenting upon the well results, ROC's Chief Executive Officer, Dr John Doran stated that:
"From the outset, Bravo-1 was clearly identified as a high risk exploration wildcat well and Block H as an area that would need more than one well to adequately test its petroleum potential.
Although commerciality is the only real measurement of success, the technical team can take encouragement from the fact that the geological information the well delivered was largely in line with pre-drill predictions and will be extremely useful when it comes to picking the location of the next well, which is expected to be drilled next year.
On a regular basis, ROC tries to expose its shareholders to wells which have the potential to change the Company,. At the same time, it tries to manage the downside risk which normally attaches itself to such opportunities. Bravo-1 was just such a well. The next one in this series of potential big hits will be Willows-1, which will test a potentially large onshore UK gas prospect in the third quarter of this year."
1 The Atlas Group consists of two privately owned companies: Atlas Petroleum International Limited and Osborne Resources Limited.
2 ROC is carried through the agreed budgeted Bravo-1 well costs by Pioneer.
Bruce Clement
Chief Operating Officer
E-mail: bclement@rocoil.com.au
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KEY POINTS
· The Bravo-1 deep water wildcat exploration well in the Rio Muni Basin, offshore Equatorial Guinea, West Africa, is drilling ahead in 12 ¼ inch hole at 2,760 mBRT (metres below rotary table) towards a prognosed Total Depth of 3,200 mBRT. Since the well commenced drilling on 6 June 2004 operations have proceeded on schedule and on budget.
BLOCKS H15 & H16 (COLLECTIVELY “BLOCK H”), OFFSHORE EQUATORIAL GUINEA, WEST AFRICA (ROC: 15% FREE CARRIED & TECHNICAL MANAGER)
Since ROC’s last ASX release dated 7 June 2004, the 36 inch conductor casing has been set at 1,617 mBRT, the 13 3/8 inch casing set at 2,413 mBRT and the subsea BOP (Blowout Preventer) and drilling riser successfully run and pressure tested.
At 22:00hrs, local time, 14 June 2004, the current operation was drilling ahead in 12 ¼ inch hole at 2,760 mBRT towards a prognosed Total Depth of 3,200 mBRT. The potential reservoir target is below 3,000 mBRT.
Bravo-1 is located in 1,509 metres of water 180 km southeast of Malabo, the capital of Equatorial Guinea, West Africa. The well is being drilled by the Sedco Energy a fifth generation, dynamically positioned drilling vessel with ROC managing the operation.
It is expected to be about another week before the rig is released following evaluation of the wireline logs after Total Depth has been reached. Regardless of the drilling results, the Joint Venture does not intend to test the well because of commercial and logistical considerations. Neither does the Joint Venture intend to release any information relating to the presence or absence of hydrocarbon shows at Bravo-1 until an evaluation of the wireline logs has been undertaken. This is because, in a wildcat well such as Bravo-1, oil shows without supporting log data are not of any commercial relevance.
Subsequent to the Pioneer farmin, detailed in ROC's ASX Release dated 7 June 2004 , the Block H Joint Venture will consist of
:
The Atlas Group (Operator) 1 ....................45%
Pioneer ................................................20%
Sasol Petroleum International (Pty) Ltd ..... 20%
ROC (Technical Manager) 2 ......................15%
1 The Atlas Group consists of two privately owned companies: Atlas Petroleum International Limited and Osborne Resources Limited.
2 ROC is carried through the agreed budgeted Bravo-1 well costs by Pioneer.
Bruce Clement
Chief Operating Officer
E-mail: bclement@rocoil.com.au
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KEY POINTS
· On 6 June 2004, the Sedco Energy, fifth generation, dynamically positioned, drilling vessel commenced drilling the Bravo-1 wildcat exploration well in 1,509 metres of water in the Rio Muni Basin, offshore Equatorial Guinea, West Africa. The well is targeting Tertiary channel sands in a possible stratigraphic trap with the potential to contain mean recoverable proved and probable oil reserves in excess of 100 million barrels.
1. BLOCKS H15 & H16 (COLLECTIVELY “BLOCK H”), OFFSHORE EQUITORIAL GUINEA, WEST AFRICA (ROC: 35% - REDUCING TO 15% AFTER FARMOUT - & TECHNICAL MANAGER)
At 14:00hrs on 6 June 2004, local time, the Sedco Energy, fifth generation, dynamically positioned, drilling vessel started drilling the Bravo-1 wildcat exploration well in 1,509 metres of water in the deep water Rio Muni Basin, offshore Equatorial Guinea, West Africa. (Attachment 1)
As of 01:30hrs, local time, Monday, 7 June 2004, the current operation was drilling ahead in 17½ inch hole at 1,760 mRT (metres below rotary table). Prognosed Total Depth is 3,200 metres.
The well is located some 180 km southeast of Malabo, the capital of Equatorial Guinea, and approximately 75km north of the Amerada Hess-operated oilfields in Block G. (Attachment 1)
The well is expected to take a total of two to three weeks to drill, log and fully evaluate prior to plugging and abandonment - which will be undertaken regardless of the results of the well - and rig release. During the drilling operation ROC will make weekly releases to ASX regarding the well’s progress and will provide a summary of key results after the main reservoir objective has been penetrated and logs have been run over any zone of potential interest.
The well is targeting Tertiary channel sands within a stratigraphic trap identified by high-resolution 3D seismic. The Bravo Prospect has the potential to contain proved and probable recoverable oil reserves in the order of 116 million barrels.
As detailed in ROC’s release to ASX issued within the last hour, the Company has executed a Farmout Agreement with an affiliate of US-based Pioneer Natural Resources Company (“Pioneer”) whereby Pioneer will earn a 20% interest in Block H for a consideration which includes the provision to ROC of a carry of its share of the cost of Bravo-1 and also the cost of its retained 15% of a second well to be drilled in Block H in 2005. Pioneer is a top-tier US independent oil and gas company with a market capitalization in the order of US$3.7 billion/A$5.3 billion with 2003 cash flow from operations of US$764 million.
After the Pioneer farmin has been completed, the Block H joint venture will consist of:
The Atlas Group (Operator)……….. 45%
Pioneer…………………………...…..…..… 20%
Sasol……………………………...…..…..….20%
ROC (Technical Manager) ……………15%
Commenting on Bravo-1, ROCs Chief Executive Officer, Dr John Doran, stated that:
• “For ROC, Bravo-1 is a potential company-maker. However, we should never lose sight of the fact that it is also a wildcat exploration well testing a stratagraphic play concept in deep water offshore West Africa. Because of this, Bravo-1 has a risk profile which is somewhat higher than that which is usually considered to be appropriate for a company of ROCs size - which is one of the reasons why we have farmed out to Pioneer.
• Regardless of the results of Bravo-1, it will take more than one well to adequately test the petroleum potential of Block H. Therefore, perhaps the best way for ROC shareholders to view Bravo-1 is that, while a positive result would dramatically increase the value of the entire company, a less encouraging outcome will still provide extremely valuable technical data which will be used to determine the location of the second well, which is currently expected to drill during 2005.”
Bruce Clement
Chief Operating Officer
E-mail: bclement@rocoil.com.au
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KEY POINTS
· An affiliate of the US-based Pioneer Natural Resources Company has agreed to acquire from ROC a 20% interest in Blocks H15 & H16, offshore Equatorial Guinea, West Africa. Prior to the farmout to Pioneer, ROC's interest in these blocks was 35%. Pioneer will meet ROC’s obligation to pay 70% of the Bravo-1 exploration wildcat well, which started drilling on 6 June 2004. Pioneer will also carry ROC’s retained 15% interest through the drilling of a second well currently scheduled for 2005, and provide ROC with a further US$2.5 million work programme carry in the event that a discovery is approved for development. ROC will retain Technical Management of the Joint Venture through the drilling of Bravo-1 but, thereafter, Pioneer can acquire the Technical Manager's role provided that it meets certain other criteria. The transaction is subject to normal industry terms and conditions, including receipt of Government approval.
1. THE TRANSACTION
ROC is pleased to advised that it has entered into a Farmout Agreement "(the Agreement") with an affiliate of Pioneer ("Pioneer"), with regard to its interests in Blocks H15 and H16 (collectively "the Block" or "Block H") in the deep water Rio Muni Basin, offshore Equatorial Guinea, West Africa (Attachment 1). The essence of the Agreement is:
• Pioneer will acquire a 20% interest from ROC which will retain a 15% interest in the Block.
• Pioneer will fund ROC’s obligation to pay 70% of the cost of the Bravo-1 exploration well; provide a 15% free carry through the second well in Block H, which is currently expected to be drilled during 2005; and provide a further US$2.5 million work programme carry in the event that a discovery is approved for development. The 70% carry through Bravo-1 reflects the final earning phase of ROC's own farmin to Block H.
• ROC will remain Technical Manager of Block H through the drilling of the Bravo-1 well. However, Pioneer can acquire Technical Management of the Block subsequent to the drilling of Bravo-1 provided it meets certain criteria.
• The farmout is subject to normal industry terms and conditions, including the approval of the Government of Equatorial Guinea.
2. THE JOINT VENTURE
Subsequent to the Pioneer farmin the interests in the Block H Joint Venture will be composed of corporate entities from the United States, Australia, Nigeria and South Africa. Specifically:
The Atlas Group (Operator)……….. 45%
Pioneer…………………………...…..…..… 20%
Sasol……………………………...…..…..….20%
ROC (Technical Manager) ……………15%
3. PIONEER
Dallas-based Pioneer, is a top-tier independent US oil and gas company, with a market capitalisation of US$3.7 billion /A$5.3 billion. Pioneer's proved reserves approximate to 4.7 trillion cubic feet of gas equivalent or 789 million barrels of oil equivalent. Cash flow from Pioneer's operations for 2003 was US$ 764 million. The company is the product of a 1997 merger between MESA Inc and Parker and Parsley Petroleum Company. The latter company is best known in Australia for its acquisition of Bridge Oil Ltd in the mid-'90s.
Pioneer has a successful track record for discovering and developing oil and gas fields in deep water Gulf of Mexico and offshore and onshore Africa, as well as North America and Argentina. Pioneer produces from five fields in the deep water Gulf of Mexico and is expecting two other fields to come on to production soon. In Africa, Pioneer has discovered and developed fields offshore South Africa and onshore Tunisia, and is currently working on a development plan for its oil discoveries offshore Gabon.
4. THE PROSPECTIVITY OF BLOCK H AND THE STATUS OF BRAVO-1
Details regarding operations at Bravo-1 will be provided in a separate ROC release to ASX which is due to be distributed within an hour of this release. In the meantime, the following comments summarise the relevant operational details.
In April, 2004, ROC, as Technical Manager for and on behalf of the Block H Joint Venture, contracted the "Sedco Energy", a fifth generation, dynamically positioned, drilling vessel, to drill the Bravo-1 exploration wildcat well in the deepwater Rio Muni Basin, offshore Equatorial Guinea, West Africa. The well, which started drilling on 6 June 2004, is expected to take two to three weeks to reach a Total Depth of 3,200 metres and subsequent rig release. Bravo-1 is located in 1,509 metres of water, about 180 km southeast of Malabo, the capital of Equatorial Guinea, and approximately 75 km north of the Amerada Hess-operated oil fields in Block G (Attachment 1).
Bravo-1 will target Tertiary channel sands within a potential stratigraphic trap identified by high-resolution 3D seismic. The Bravo Prospect is estimated to have a mean recoverable reserve potential of 116 MMBO. The discovery of oil in the Tertiary at Bravo-1 would open up a new play in the area and encourage the drilling of other, broadly comparable, nearby prospects and leads which have already been identified from the 3D seismic.
5. ROC'S CHIEF EXECUTIVE OFFICER'S COMMENTS
Commenting on the farmout to Pioneer, ROC's CEO, Dr John Doran, stated that:
"ROC's Prospectus, dated 2 April, 2004, and the Company's subsequent ASX Releases, as well as public comments at its Annual General Meeting held on 19 May, 2004, contained statements to the effect that, 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. This is that farmout.
ROC is pleased to be involved with Pioneer's debut in deep water exploration offshore West Africa. We look forward to Pioneer adding further value to an ethnically diverse Joint Venture which, during the last several years, has proven itself to be harmonious and effective. In particular, Pioneer's deep water experience in the Gulf of Mexico and its proven exploration and development track record in other parts of Africa, introduces a new and exciting dimension to the search for oil in Block H.
Regardless of the results of Bravo-1, the petroleum potential of Block H cannot be adequately tested by one well. The farmout to Pioneer recognises this fact. The need to ensure that at least two wells are drilled in the Block during 2004-05 was one of ROC's main motivations for farming out.
If Bravo-1 is an oil discovery the potential of the numerous other prospects and leads in the immediately surrounding area, will be substantially upgraded and, through the drilling of a single wildcat well, ROC's asset base will have been considerably enhanced. If Bravo-1 does not live up to its potential it will still represent a regionally important data point which will help guide the decision as to where the second well, which is currently expected to be drilled in 2005, should be located."
Bruce Clement
Chief Operating Officer
E-mail: bclement@rocoil.com.au
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KEY POINTS
· ROC, as Technical Manager of the H Block Production Sharing Contract (“Block H”) in the deepwater Rio Muni Basin, offshore Equatorial Guinea, took possession at 00:00 local time on 1 June 2004 of the Transocean “Sedco Energy” dynamically positioned semi submersible drilling rig, to drill the Bravo-1 exploration well. Drilling is expected to commence on around 7 June 2004.
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 taken possession of the contracted drilling rig, 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 rig is now in transit from Nigerian waters to the well location in Equatorial Guinea.
The well, which is expected to start drilling on or around 7 June 2004 in approximately 1,500 metres of water, is about 180 km southeast of Malabo, the capital of Equatorial Guinea and some 75 km north of the Amerada Hess-operated oil discoveries in Block G. Bravo-1 will target Tertiary channel sands with a mean recoverable reserve estimate of 116 MMBO. It is expected to take up to three weeks to drill and fully evaluate.
Bruce Clement
Chief Operating Officer
E-mail: bclement@rocoil.com.au
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