RH Petrogas to Drill 40-100 Wells in China's Fuyu 1 Block in 2015
Singapore-listed RH Petrogas Limited (the Company), the ultimate holding company of Kingworld Resources Limited (KRL), provided Friday the following update on the project undertaken by KRL at Fuyu 1 Production Sharing Contract (Fuyu 1 Block) in the Songliao Basin, Jilin Province, China, which covers an area of approximately 98.4 square miles (255 square kilometers), for the three months ended Jan. 31.
1. Any material changes to the reserves or resources (including the reasons for the change)
There are no material changes to the reserves or resources since the previous announcement dated Nov. 25, 2009.
2. Details of development and/or production activities undertaken by KRL in respect of the Fuyu 1 Block Project
As announced Oct. 16, 2014, the National Development and Reform Commission (NDRC) of the People’s Republic of China has approved the Overall Development Plan (ODP) for the phased development of the Yongping Oilfield in Fuyu 1 Block. With this approval, development drilling has commenced at Yongping Oilfield in the Fuyu 1 Block. The approved ODP entails the drilling of up to 1,008 shallow wells over a five year period. The crude oil in the Fuyu 1 Block is low sulphur and heavy in nature with an API of 18.5 degree.
Pre-development preparation and the procurement of long lead items started in early 2013. This allowed the drilling of the first 15 development wells to take place soon after the receipt of the ODP approval. The wells were completed within two months of drilling as scheduled. Plans are in place to drill another 40 to 100 shallow development wells in 2015. Production will be ramped up progressively as more wells are drilled under the approved ODP.
3. A summary of the material expenditure incurred on the evaluation, development and/or production activities for the three months preceding this announcement
The summary of the expenditure for the three months preceding this announcement is as follows:
- Development expenditure - $1.235 million
- Fixed Assets - $0
- Administrative expenses - $196,000
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