Following the completion of the Phase One survey in July 2006, and commencement of Phase Two survey in August 2006, Geo-COSL, the Contractor appointed by Primeline, has completed the survey of 549 sq km over the prospective area near the Company's existing Lishui 36-1 discovery. The vessel Binhai 512 has been de-mobilized and the data is being transferred to the processing center.
The Phase Two data will be merged with the Phase One data to provide the Company with comprehensive 3D seismic information on the prospects and leads in the area immediately surrounding the gas discovery Lishui 36-1. Initial processing outputs are expected at end of November and will allow the interpretation to start. This 3D survey will provide crucial information for the selection of the next well location(s).
Dr. Ming Wang, the Company's CEO commented on the survey: "The completion of the survey allows us to move on with processing and interpretation in a timely fashion. We have now acquired sufficient 3D seismic data over the Lishui Gas Play to plan an optimal drilling program to commercialize our gas discovery. With the removal of seismic schedule uncertainty, we can now proceed to finalize the arrangements with drilling contractor(s) and CNOOC to secure a rig for the planned drilling program in 2007."
Primeline owns a 75% interest in the Petroleum Contract for Block 25/34 in the East China Sea with China National Offshore Oil Corp. and is also the operator for the Block. The Company made the gas discovery, Lishui 36-1, within the Block through two wells which have flow rates of 9.9 and 12.6 mmcfd of natural gas, respectively. The Block encompasses 7,006 sq km and contains many other potential prospects in addition to the Lishui gas play.
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