The Bussabong 8B delineation well was drilled to a total depth of 8,285 feet from a surface location approximately nine km south-southeast of Bussabong 6A and 6D delineation wells (see SGXNET announcements No. 1 of 13 June 2005 and No. 63 of 15 June 2005). Preliminary evaluation from well logs indicates that the Bussabong 8B delineation well intersected approximately 56 vertical feet of net gas-bearing sandstones in several reservoir intervals. Bussabong 8B will be plugged and abandoned.
Pursuant to the terms of the farm-out arrangement with Horizon Oil (Thailand Holdings) Limited and Tana International Exploration Company, the cost of the Bussabong 8B delineation well is borne by Horizon and Tana.
Horizon and Tana have exercised their option to relinquish their interests in the Block B 12/32 contract area in return for being released from any further drilling obligation in Block B 12/32, and will also relinquish their interests in the Block B 11/38 contract area. PEARL's effective interest in the two blocks reverts to 70% from 35% and that of Choice Plus Holdings Limited reverts to 30% from 15%.
"We are naturally disappointed by the results of the Bussabong drilling, although we considered it a high risk play. We will undertake a complete reassessment of the gas potential in the block before making any decision on our future strategy," said Chris Gibson-Robinson, PEARL's Chief Technical Officer.
The ENSCO 57 jack-up drilling rig will move to the Chang Daeng 3 commitment well location in the Block B 11/38 contract area approximately 47 km northwest of Block B 12/32. Pursuant to the terms of the farm-out arrangement and notwithstanding relinquishment of their interests in Blocks B 12/32 and 11/38, Horizon and Tana have an outstanding obligation to pay for 50% of the costs of the commitment well.
The result of the Bussabong 8B delineation well does not have any impact on the financial performance of the PEARL group of companies for 2005.
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