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

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KEY POINTS

• The latest advice received with regard to the availability of the rig contracted for ROC’s offshore China drilling programme is that there has been a further delay, hopefully slight. The rig is now expected to be available in April, subject to the progress of its current operation.

• ROC has signed a Letter of Intent with regard to contracting a deep water drilling rig for its first exploration well in Block H in the Rio Muni Basin, offshore Equatorial Guinea. It is anticipated that the rig contract will be signed within the next two weeks and that drilling will commence in June/July 2004.

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

Within the last week ROC had been advised that the Nanhai IV drilling rig had made considerable progress at its current operation and it looked as if the rig would be received by ROC, as Operator of Block 22/12, by end-March 2004, in accordance with ROC’s most recently announced schedule (See ROC’s ASX Release dated 15 March 2004). However, further advice received in the last day or two suggests that receipt of the rig will be delayed into April, hopefully the first half of April, because of continuing down hole difficulties at the rig’s present location.

Commenting on the latest delay, ROC’s Chief Executive Officer, Dr John Doran stated that:

The delay is frustrating for all concerned. However, the operator currently utilizing the Nanhai IV has been very communicative and courteous with regard to keeping ROC informed of the situation and we are absolutely convinced that they are as anxious to release the rig to us as we are to receive it from them. However, until that happens, all ROC can do is to keep its shareholders informed as to how the schedule evolves.

2. BLOCKS H15 & H16 (COLLECTIVELY “BLOCK H”), RIO MUNI BASIN, DEEPWATER EQUATORIAL GUINEA (ROC 35% and Technical Manager)


ROC has executed a Letter of Intent in relation to contracting a deep water drilling rig for operations in the Rio Muni Basin, offshore Equatorial Guinea. The drilling contract is expected to be signed within the next two weeks on the basis of one firm and one contingent well. Drilling is expected to commence in June/July 2004. As a normal part of ROC’s risk mitigation process, the Company will consider farming out part of its equity in Block H, subject to commercial terms and conditions.

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

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KEY POINTS

• ROC’s exploration, appraisal and potential development drilling programme for the balance of 2004 is likely to comprise at least one well per month, with 10 firm wells and, perhaps, as many as 17 wells scheduled for drilling (Attachment 1). The wells will be drilled onshore UK, in deep water offshore West Africa, specifically Mauritania and Equatorial Guinea, and in shallow water offshore China and Western Australia. ROC will operate all the wells except those drilled in Mauritania and one of the Australian wells.

• The programme is expected to include the Willows-1 exploration well in the UK, which will test a Saltfleetby-sized gas prospect and the Bravo-1 exploration well in Equatorial Guinea which will test a Chinguetti-sized Tertiary channel sand prospect. In addition, ROC expects that there will be a continuous drilling programme of at least four wells offshore Mauritania commencing August/September 2004. There will also be two to four exploration wells in the northernmost part of the offshore Perth Basin, several hundred kilometres north of the Cliff Head Oil Field, and a two to five well exploration and appraisal drilling programme offshore China, details of which have already been provided in ROC’s recent ASX releases.

• As part of ROC’s planning for its 2004 drilling programme, the Company has exercised an option to acquire from Norwest Energy NL (“Norwest”) a 7.5% interest in WA-226-P, in the northern part of the offshore Perth Basin, through the payment of a $200,000 option fee to Norwest. On this basis, ROC will participate at a 7.5% funding level in the Fiddich-1 exploration well which is expected to be drilled in June 2004.

• The latest advice received with regard to the availability of the rig contracted for ROC’s offshore China drilling programme is that it may be available by the end March 2004 subject to the progress of its current operation.

1. ONSHORE UK

ROC is currently considering six candidates for its onshore UK 2004 drilling programme of which it expects to drill one to three wells. The six wells being considered are Willows-1 and Errington-1, both exploration wells; the Saltfleetby Brinsley Abdy and Biscathorpe appraisal wells; the Saltfleetby-8 development well and a new drill of, or a re-entry to, the Cloughton-1 gas discovery. Willows-1 is considered to be a very strong candidate for drilling. Selection of the one or more other wells to be drilled will be finalised by mid-year when current technical studies are complete.

1.1 Willows-1 (ROC: 100% and Operator)

Recently, ROC received planning permission to drill the Willows-1 exploration well in PEDL030 in the Cleveland Basin, approximately 60 km northeast of York. The Willows Prospect is defined by 3-D seismic and has an unrisked mean recoverable gas reserve potential estimated by ROC to be approximately 108 bcf, which is slightly larger than the Saltfleetby Gas Field. The well will target Permian Rotliegendes sandstones which are the primary producing reservoirs in offshore fields which lie on trend approximately 30 km to the east of Willows. The Willows Prospect is a combination structural-stratigraphic trap on the southern flank of a large anticline. The exploration risk is considered to be medium to high but it is mitigated by the prospect’s large upside potential which, if realised, would have a very positive impact on the value of the Company.

2. AUSTRALIA

2.1 WA-226-P (ROC: 7.5%)

ROC has exercised its option to acquire from Norwest a 7.5% interest in WA-226-P where the Fiddich-1 exploration well is expected to be drilled in June 2004. The terms of the option exercise are detailed in ROC’s release to ASX dated 27 June 2003, including the payment to Norwest of an option exercise fee of $200,000.

On this basis, ROC expects to participate, at a 7.5% level, in the drilling of Fiddich-1 which will test a large structure, well defined by 3-D seismic, that lies on a broad regional trend that extends for approximately 350 km northwards from the Cliff Head Oil Field. Although the lack of commercial discoveries in the vicinity of Fiddich-1 would suggest that it should be regarded as a high risk exploration well, the discovery of commercial oil at Fiddich-1 would high grade the entire Cliff Head-Fiddich trend and significantly enhance the value of ROC’s acreage holding in the region, which approximates to 7 million contiguous gross acres, almost all of which are operated by ROC.

3. EQUATORIAL GUINEA (ROC: 35% and Technical Manager)

3.1 Blocks H15 and H16 (“Block H”) (ROC: 35% and Technical Manager)

Further to ROC’s ASX announcement dated 23 February 2004, the Company is continuing contract negotiations relating to a deep water drilling rig for its first exploration well in Block H in the Rio Muni Basin, offshore Equatorial Guinea. It is anticipated that the well will test the Bravo Prospect, a Tertiary channel sand play, which is estimated by ROC to have a mean recoverable oil reserve potential in the order of 116 mmbo gross, which bears comparison to the size of the Chinguetti Oil Field, offshore Mauritania. The Bravo Prospect, which is well defined by high resolution 3D seismic, extends a small distance into an adjacent block. In the event of a discovery, ROC believes that the estimated mean reserve for the Bravo Prospect would be sufficient to justify a stand alone development. However, there are several other potentially attractive prospects of varying sizes in the vicinity of Bravo that could also be considered for drilling if the Bravo-1 well is successful.

4. MAURITANIA

4.1 PSCs A and B (ROC: 3.693% to 4.155%)

The Woodside-led joint venture, which is exploring, appraising and looking to develop prospects and fields in PSCs Areas A and B in deepwater, offshore Mauritania, is currently finalising its 2004 drilling programme. Subject to final details being agreed, ROC expects that at least one deepwater drilling rig may be contracted for a continuous drilling programme commencing in August/September 2004 and that such a programme could result in at least four wells being drilled during the balance of the calendar year. The wells are expected to be a mix of exploration wells, Tiof/Tiof West Oil Field appraisal wells and Chinguetti Oil Field development wells.

5.0 CHINA

5.1 Block 22/12, Beibu Gulf (ROC: 40% and Operator)

As advised in a number of recent ASX releases, ROC and its co-venturers in Block 22/12 in the Beibu Gulf, offshore China, are waiting to receive the Nanhai IV drilling rig so that they may commence an exploration and appraisal drilling programme consisting of at least two and perhaps as many as five wells. The latest information received by ROC suggests that the Nahai IV drilling rig may be made available by end-March 2004, subject to the progress of its current operation.

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

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KEY POINTS

• The mechanical problems at the third party-owned gas compression facility in the UK have been rectified and the compressor was recommissioned on 4 March 2004. As a result, gas production at the Saltfleetby Gas Field is back up to around 20 MMSCFD and may edge a little higher when all the wells are back on full production.

• The latest information provided to ROC regarding the ROC-operated, multi-well, drilling programme in the Beibu Gulf, offshore China, is that it is now expected to start during the second half of March, hopefully around 22 March 2004, subject to the designated rig being released from its current operation.

1. SALTFLEETBY GAS FIELD, ONSHORE UK (ROC: 100% and Operator)

ROC is pleased to advise that the gas compression facility at the third party-owned Theddlethorpe Gas Terminal, which receives all the production from the Saltfleetby Gas Field, has been recommissioned following the rectification of mechanical problems that occurred last month. As a result, production at Saltfleetby has increased to approximately 20 MMSCFD and is expected to edge a little higher as all the wells are brought back on to full production. The timing of the resumption of full production at Saltfleetby is consistent with ROC’s forecast in its release to ASX dated 23 February 2004.As a result of Saltfleetby gas production being constrained for 26 days the Company anticipates that towards A$2 million of operating cash flow will be deferred as opposed to the A$5 million deferral estimate provided in ROC’s ASX Release dated 13 February 2004 when at least two months downtime was expected. Some of this deferred cash flow is expected to be recaptured during the balance of the year, particularly since current spot gas prices in the UK are very strong being recently around A$6.00/mcf, the highest March price for three years.
2. BLOCK 22/12, BEIBU GULF, OFFSHORE CHINA (ROC: 40% and Operator)

The latest drilling rig schedule provided to ROC suggests that the first well in the multi-well drilling programme is now expected to commence during the second half of March, hopefully around 22 March 2004, subject to a timely release of the rig from its current, much delayed, operation. As stated in previous releases to ASX, the first well in the programme, the Wei 12-7-1 exploration well, will take about ten days to test a prospect with the potential to contain several tens of millions of barrels of recoverable reserves.Wei 12-7-1 will be followed immediately by another ten day well, Wei 12-8-3, an appraisal well of the Wei 12-8 oil accumulation which is estimated to have the potential to contain recoverable reserves of between 20 and 30 MMBO, subject to successful appraisal.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. In order to drill the fourth and fifth wells in this programme, the results of the first two or three wells would have to be very compelling.The Block 22/12 Joint Venture consists of:
Roc Oil (China) Company . . . . 40% and Operator
Horizon Oil NL . . . . . . . . . . . .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 will reduce on a pro-rata basis by up to 51%, if the China National Offshore Oil Corporation (“CNOOC”) exercises its right to participate for up to a 51% equity level in the development.

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

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and agreement click here

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

Return to ASX Releases main page