Under the terms of the Agreement, ROC will earn a 20% participating interest in WA 351 P in consideration for paying a share of the cost of the Jacala-1 exploration wildcat well, up to an agreed limit equivalent to US$4 million total net cost to ROC, including a farmin promote to BHP Billiton. If any additional well costs are incurred they will be shared proportionately. ROC will not be required to reimburse any pre-drill permit costs.
As defined by 2D seismic, the Jacala Prospect is a large, simple, 4-way dip closed structure covering more than 300 sq km/70,000 acres with a vertical closure in excess of 100m/300ft. It is located in approximately 1,100 meters of water about 200km west of Barrow Island and 100km northwest of the Enfield Oil and Gas Field. The reservoir target is a sandstone sequence equivalent in age to the Barrow Group which is well established as a productive reservoir elsewhere in the basin. The potential reservoir is expected to be encountered at approximate 2,200 meters sub-sea. The well is expected to commence drilling during 4Q2005.
Subsequent to the farmin, the WA-351-P Joint Venture will consist of BHP Billiton (Operator with 55%), a subsidiary of Tap Oil Limited (25%) and ROC (20%).
Commenting on the farmin, ROC's Chief Executive Officer, Dr John Doran stated that:
"ROC has no illusion about the Jacala Prospect: it is high risk and high reward. If it contains oil it could have a very big impact on the Company. The farmin is consistent with the Company's strategy of serving up to shareholders several "big hit" drilling opportunities each year. In this sense, Jacala-1 will take its place alongside other wells that ROC has lined up as part of a busy exploration drilling program for the latter part of 2005. Apart from Jacala-1 this program also includes key wells in deep water offshore Equatorial Guinea and Mauritania, shallow water offshore China, onshore UK and onshore New Zealand."
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