Discretionary Second Seismic Campaign Completed
CNPCIT has confirmed to TG World that the acquisition crew contracted by BGP Niger Inc. (a geophysical contracting subsidiary of CNPC) acquired an additional 20 lines of 2D seismic data, for a total of 912 line-kilometers, in connection with the second campaign. This additional data brings the total of new data acquired by CNPCIT/TG World to 94 lines, totaling 2,598 line kilometers of seismic data. The seismic acquisition component of the Minimum Work Program required CNPCIT and TG World to shoot 1,500 kms.
The data has been processed in the CNPCIT processing centre in Niamey, Niger, and a copy has been provided to TG World for independent evaluation in Calgary.
This new seismic data was acquired to:
1 provide in-fill coverage over the two geologic structures targeted for drilling in 2006, in order to assist in more precisely selecting the drilling locations (the structures to be drilled were decided in December 2005);
2 acquire additional prospect-specific data to assist in the selection of a location for the third well of the planned back to back three-well program (with the third well not expected to be drilled until early 2007);
3 add a number of regional lines to assist in the overall understanding of the block; and
4 assist in future program design.
CNPCIT has advised TG World that the BGP crew has moved to CNPCIT's adjacent 100% Bilma Block. Following completion of the Bilma seismic program, CNPCIT and TG World expect that the crew will return to Tenere to initiate a third seismic program, which is scheduled to run concurrent with the planned exploration drilling program.
Status of Drilling Mobilization
CNPCIT has also confirmed to TG World that it has commenced preparatory work to construct the operations base and the first drilling site platform on the Tenere concession.
In addition, TG World has been advised that all of the equipment for the drilling of the three commitment wells is being assembled in China and elsewhere for transshipment to Niger, via the port of Cotonou, Benin. CNPCIT has confirmed its intention to assemble a total equipment package in country, before the drilling program begins, in order to minimize disruption in operations once the exploration-drilling program commences. In common with the experience of many international operators in the current environment, CNPCIT has encountered some delays in acquiring certain equipment required to support the drilling program because of the international pressure on drilling services and supply resulting from the high level of international petroleum exploration activity. While preparations for the three well drilling program are proceeding, CNPCIT and TG World are not able to provide a definitive date for drilling startup at this time.
"There's been much discussion in the media about how aggressively the Chinese operating companies are investing around the world. TG World is reaping the benefits of the Chinese commitment to find and develop new oil," said TG World's CEO, Cliff James, commenting on the state of advancement of the Tenere operations. "It's true that CNPCIT is subject to many of the same supply constraints that have affected the rest of the international exploration and development industry, but, in our view, it is attacking the program more expeditiously than many other companies would, and TG World is carried through initial elements of the exploration program."
Exploration Activities in Niger Accelerating
Mr. James added, "The Niger Government has advised us that the Algerian National Oil Company, Sonatrach, has signed a new Study Agreement on the Tamesna Block in NorthWest Niger, next to the Algeria border, adding to their Kafra Exploration position. To the South, Exxon Petronas have reported that they are in negotiations with Niger to extend the term of the Agadem Block in preparation for another drilling program. Other available exploration blocks are apparently being pursued with several of these being currently negotiated with the Niger government. These are positive signs that Niger is becoming a larger image on the radar screen of the international petroleum business."
CNPCIT holds 80% of the Tenere Concession in Niger; and TG World holds 20%. TG World is carried for almost all of the costs of the Minimum Work Program of 1,500 kms of 2D seismic and 3 wells and any additional 2D or 3D seismic conducted up to the beginning of the second well. TG World will repay CNPCIT the agreed costs of the Carried Program in the event of subsequent production.
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