Under the agreement, Sojitz will participate in the ongoing development of the Grove Field and the 2007 exploration and appraisal drilling program which consists of the West Cutter Prospect, the Seven Seas Discovery and two wells planned in the West Sole Area under the existing Exploration and Development Agreement between BP Exploration Operating Company Limited and Newfield. Sojitz will earn 15% of Newfield's interest in the Grove Field and 20% of Newfield's interest in the West Cutter, Seven Seas and West Sole Area Prospects.
This transaction is valued at approximately $100 million and is subject to the necessary U.K. government approvals.
A production platform for the Grove development was recently installed in the field. The platform has production capacity of approximately 100 MMcf/d of gas and 2,000 BCPD. Newfield is currently drilling the Grove #5 well as a horizontal producer in the central and western fault blocks. Newfield anticipates that the field will be on-line in December 2006. Production is expected to ramp up to approximately 60 MMcf/d and 1,000 BCPD in early 2007.
The recent #6 exploration well was drilled from a remote surface location into the western fault block approximately 2.1 km west of the Grove platform. The well found approximately 40' of net gas pay and was temporarily abandoned with a subsea production tree installed. Final plans for the #6 well will be determined once the information obtained from the platform development wells has been integrated into the overall field development plan.
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