Carnarvon Estimates Contingent, Prospective Resources in Thailand
Carnarvon provided the results of an independent estimate of contingent and prospective resources related to the applications for two production licenses encompassing recent crude oil discoveries onshore Thailand. The Production Area Applications (PAA) cover the Wichian Buri Extension Field (WBEXT) in Concession L44/43 and the L33-1 / L33-2 fields in Concession L33/43.
PAA have been applied for covering the recent discoveries in the L44 concession at WBExt and L33 concession at L33-1&2.
It is anticipated the L33 PAA will be approved, the two shut-in wells will be producing, by December 2010.
Contingent resources assigned to the WBV1 and WBV2 volcanic reservoirs and the F sandstone reservoir in Concessions L44 and
L33 net to Carnarvon’s 40% operated working interest is 10.3 million barrels recoverable at a best estimated confidence level within the PAA.
Prospective resources assigned to the WBV1 and WBV2 volcanic reservoirs in Concessions L44 and L33 net to Carnarvon’s 40%
operated working interest is 4.5 million barrels recoverable within the PAA.
Contingent & Prospective Resource Estimates
The estimates of contingent and prospective resources have been conducted by Gaffney Cline & Associates-Singapore (“GCA”) and have been prepared as part of two production license area applications submitted to the Thailand Department of Mineral Fuels (“DMF”) incorporating drilling results and production data to October 28, 2010.
Contingent resource volumes estimated in these GCA reports are contingent on the Operator of the permits, Pan Orient, receiving approval for the two production license area applications as submitted to the DMF. Pan Orient has no reason to believe these two production license applications will not be approved by the DMF and anticipates each production license application to be approved within approximately 90 days from the date of submission.
The extent of the crude oil accumulations in the reservoirs set out in these estimates of contingent and prospective resources, and associated production levels, will not be known until after additional appraisal drilling, production testing, defining the oil / water contacts and defining the oil & gas contacts.
The full extent of the conversion of GCA’s estimates of contingent and prospective resources provided here, into reserves will be dependent mainly upon:
- the approval of the two proposed production licenses by the DMF, and
- the results of further drilling and production performance at the WBEXT, L33-1, and L33-2 crude oil accumulations between now and year-end 2010.
In the GCA contingent and prospective resource evaluation for the WBEXT field, no resources of any classification were assigned to what are interpreted to be material portions of the WBEXT fault compartments at the WBV1 and WBV2 volcanic reservoir levels that extend into Concession L33 as these were beyond the scope of the current production license area applications. No well has been drilled to date on WBEXT field fault compartments extensions into Concession L33, and under DMF regulations the application for a production license over these areas in Concession L33 is not permitted until such a well has been drilled. Drilling pad WBEXT-4 is currently under construction approximately 300 metres south of the boundary between Concession L44 and Concession L33 from which a number of wells are proposed for late 2010 or early 2011 to test the WBV1 and WBV2 volcanic reservoirs at a subsurface target location within Concession L33.
The Company is expecting that for the 2010 year-end reserve evaluation, reserve additions from the recent field discoveries at WBEXT, L33-1, and L33-2 will more than offset the expected negative reserve reclassifications or revisions of proved and probable crude oil reserves at the NSE-F1 and NSE Central fields.
Contingent & Prospective Resource Estimates for WBEXT Field in Concession L44 (CVN 40% Working Interest non Operator)
Oil production may be sold from wells in Concession L44 under a 90 day production test approval before a new production license is granted since there has been previous commercial production to date from this concession, and a point of sale within Concession L44 has been established previously by a production license. At the end of this 90 day test period, the well must be shut in until a production license is granted by the Government of Thailand.
Contingent & Prospective Resource Estimates for the L33-1 / L33-2 Fields in Concession L33 (CVN 40% Working Interest non Operator)
Until a production license is approved by the DMF no production may be sold from wells in the L33-1 / L33-2 fields of Concession L33 since there has been no commercial production to date from this concession, and a point of sale within the concession has not been established by a production license. After receipt of a production license, the L33-1 and L33-2 wells will be placed on production, crude produced during the testing period will be sold, and it is anticipated that further appraisal wells will be drilled. The L33-1 and L33-2 production license application was submitted to the DMF in the first week of September 2010.
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