ROC OIL COMPANY LIMITED
ABN 32 075 965 856

HISTORY

• In 2006 ROC acquired a 24.5% operated interest in the offshore Zhao Dong Block, which contains the C & D producing oil fields.

• Production commenced in 2003.  At the time ROC acquired the asset in mid-2006, approximately 20 MMBO had been produced from the C and D fields.

• On 30 September 2007, operations achieved an important milestone: two years , representing more than 1.6 million man-hours, without a Lost Time Injury.

• Production commenced from the C4 Field (ROC 11.575% unitised interest) and the Extended Reach Area ("ERA") of the C&D Fields (ROC 24.5%) from new facilities commissioned in October 2008. 

GEOLOGY

• Stacked reservoir system ranging from Permian age clastics to Late Tertiary Minghuazhen Formation.

• Within the block, 27 different stratigraphic levels are known to contain oil; 16 of these are currently productive.

• Most productive zones have excellent quality reservoirs.  Some deeper targets are tighter, but also have an increase in oil API, resulting in better flow character.

• Oil is waxy with a low pour point and a low acid content.

DEVELOPMENT PLAN AND FACILITIES

• The Zhao Dong offshore facilities comprise two bridge-linked platforms.  One is dedicated to drilling and accommodation while the other is used for production and processing.

• As at mid-February 2009, the C&D fields have 31 active production wells and 18 water injection wells.

• The new C4 Field Unit facilities (commissioned in October 2008) comprise a wellhead platform and pipelines to the C&D Field platform.

• As at mid-February 2009, the C4 unitised field has 2 active production wells.

• ROC's share of production is sold into the export market.

JV PARTICIPANTS AND INTERESTS

Activity Status

• Producing.

• C&D Fields production is being augmented by development drilling, with approximately 100 wells planned to be drilled over 5 years (from 2007) as part of the Incremental Development Plan ("IDP").

• As part of the IDP, 13 wells (11 oil producers and two water injectors) were drilled in 2007 and 19 wells (10 producers in the C&D Fields and 8 producers and 1 water injector in the ERA) were drilled in 2008.  A total of 16 wells were drilled in 2009 (8 producers and 3 injectors in the C&D fields and 4 producers, 1 injector in the ERA).  Planning and preparation for the 2010 drilling campaign is in progress.  The proposed prgramme includes 9 producers and 4 injectors in the C&D Fields and 7 producers, 1 injector in the ERA.

• As part of the IDP, a second drilling platform (ODB) was installed in 4Q 2008 and was commissioned in April 2009.  A second fluid processing and storage facility (OPB) was installed in 2Q 2009 and commissioned in September 2009.  Both ODB and OPB are located adjacent to the existing Zhao Dong platforms (ODA and OPA).

• The C4 field Unit Development Plan ("UDP") included construction of new facilities and will include the drilling of 24 wells (15 oil producers and 9 water injectors) over 5 years from 2007.  Four producers were drilled in 2008.  The new pipline terminal and pipeline connections were successfully commissioned in October 2008, following which first production from the C4 Field and the ERA began.  Three producers are planned to be drilled in 2010.

• Plans for 2010 also include the installation of a gas pipeline and the initiation of gas export sales that will eliminate the need for gas flaring during normal operations.

Project Capital Investment

• ROC acquired its 24.5% interest for US$260MM, effective 1 July 2006.
• A 5-year, US$373MM IDP for the C&D oil fields was approved in February 2007 and commenced immediately.
• A 5-year, US$150MM UDP for the C4 field was approved in February 2007.

Remaining 2P Reserves

• C&D Fields - ROC net 6.9 MMBO at 30 June 2009.
• C4 Field - ROC net 0.7 MMBO at 30 June 2009.

First Production

• Commenced 2003 from the C&D Fields.
• Commenced 2008 from the C4 unitised field and the ERA.

Average Gross Production Rate for Quarter Ending 31 December 2009

• C&D Fields and ERA - 14,678 BOPD (ROC net 3,596 BOPD)
• C4 Field - 441 BOPD (ROC net 51 BOPD).