Tap Oil's Manora Development On Track

Tap Oil provided the following update on its Manora Oil Development in the Gulf of Thailand.

Tap's Managing Director/CEO Troy Hayden said, "The Manora development is a highly significant project for Tap. It is expected to more than triple our existing reserves toward the end of 2011 and deliver production and revenue in early 2014.

While much of our current focus in Thailand is on the Manora development, we also see significant exploration potential in the Kra, Hua-Hin and Sattakut basins. These exploration opportunities are being actively pursued with substantial resources committed over the next six to 18 months to define and drill them."

Highlights

• Potential to more than triple Tap's total company reserves by the end of 2011
• Final Investment Decision (FID) for Manora expected second quarter of 2012
• Manora field on schedule for first production in early 2014
• Active exploration program targeting Manora style prospects in the Kra, Hua-Hin and Sattakut basins

Manora Development Timeline

Since the acquisition, Tap has met regularly with Pearl to monitor progress on the development of the Manora field. Pearl has now set a development schedule for the field with key milestones as follows:

• 2011 Third Quarter - Field Development Plan (FDP) completed
• 2011 Fourth Quarter - Fourth Quarter Concept Selection finalized
  • - Award Front End Engineering and Design (FEED)
  • - Tap expects to book reserves
• 2012 Second Quarter - Final Investment Decision
• 2012 Third Quarter - Award Engineering Procurement and Construction (EPC) contract
• 2014 First Quarter - First oil

It is envisaged that construction will commence in 2012 and initial development drilling will occur in 2013. This schedule remains in line with our acquisition assumptions.

Manora Development Concept

The venture has been rigorous in its screening of development options and work continues with the aim of finalizing the concept selection in the fourth quarter of 2011. Tap believes that the likely development concept will be a Central Production and Processing Complex with a Floating Storage and Offtake vessel (FSO).

Following concept selection, the venture will award the contract for FEED and submit the remaining environmental and other regulatory approvals.

Upon completion of the FEED and receipt of key regulatory approvals, the joint venture will make the FID for the field. This is expected to be in the second quarter of 2012.

As the project moves toward FID, the venture will tender the contracts to build the facilities. The construction contracts are expected to be awarded at the same time as the FID is made.

Under this timetable, first production is expected in early 2014.

Reserves and Production

Under Pearl's current development timetable, Tap believes it will be in position to make an initial booking of reserves in late 2011 following concept selection and completion of the Field Development Plan. No further drilling is required to prove reserves.

The reservoirs at Manora are expected to require water flooding to maximize oil recovery. While Tap still carries the 24 mmbbl gross resource (7.2 mmbbls net to Tap) as the likely ultimately recoverable number, it is expected that in late 2011 Tap will be able to book 2P reserves of 20 mmbbls gross (6 mmbbls net to Tap) with the additional 4 mmbbls gross (1.2 mmbbls net to Tap) to be booked once actual field production confirms the effect of waterflood.

It is estimated that production from the field will commence in early 2014 and reach a peak rate of approximately 15,000 bbls per day.

Fiscal Terms

The three concessions that Tap has interests in are governed by the Thailand III Fiscal Regime that was introduced in 1989. The Thailand III Fiscal Regime involves a royalty, special remuneratory benefit (SRB) linked to drilling and income tax at 50%. This all combines to provide the concessionaire with a net take of approximately 15-20% of gross revenues over the life of the project.

Exploration

The joint venture has been focusing its exploration effort on delineating a number of prospects in G1/48 and G3/48 in order to mount a drilling campaign in the second half of 2012.

The venture's exploration effort across these concessions includes the acquisition, processing and interpretation of new seismic, reprocessing of existing seismic and regional geological and geophysical studies.

The Kra 3D seismic survey was acquired in 2007 and interpretation of this data led to the Manora discovery. Tap's interpretation of this data has generated four prospects. Pearl's current interpretation is similar to that of Tap. Deeper objectives have not yet been interpreted.

The venture is currently reprocessing the Kra 3D data using pre stack depth migration (PSDM).

he Kinnaree 3D seismic survey in G1/48 was acquired in early 2011. The fast-track processed data has been received and the interpretation is underway.

Recently the joint venture agreed to two new 3D seismic surveys in G1/48 and G3/48 – Sida and Sattakut. These surveys are aimed at locating similar prospects to Manora and additional prospects in the overlying fluvial section. Pearl is currently finalizing the tendering process and acquisition is expected to commence within the next two months. Acquisition of these surveys will take approximately three months.

The new Sida 3D seismic survey will be conducted over the Hua-Hin basin, adjacent to the existing Hua-Hin survey. The survey will be up to 700 km2 and will straddle G3/48 and G1/48. The larger Sattakut 3D seismic survey will be up to 1,800 km2 and will be over the Sattakut basin and will also straddle G3/48 and G1/48.

In G6/48, Tap is currently assessing the merits of acquiring 3D seismic over the concession. G6/48 contains the Rossukon discovery which is in fluvial sands as is typical for this part of the Gulf. Although Rossukon flowed oil at over 800 bbls per day during test, on current mapping it is not considered large enough for a stand-alone development. Entry into the Year 6 concession period at the end of 2011 involves committing to a well in 2012.

Under the terms of all three of the concessions, 50% of the acreage must be relinquished at the end of concession Year 4. The joint venture submitted its relinquishment plans to the regulator in early 2011. Under the plan, the joint venture retains all of the acreage over the prospective basins. The permit areas outlined in the maps above are prior to any relinquishments.

Concession Partners

• Pearl Energy (Operator) 60%
• Northern Gulf Petroleum Pte Ltd 40% (Tap is the 75% owner of Northern Gulf Petroleum)