"The continuing success in Vietnam keeps us moving forward towards our first development in Block 15-2/01 and reinforces our belief in the significant commercial potential of the block" said Dr. Jim Buckee, President and Chief Executive Officer of Talisman. "The well results are very encouraging because, not only do we see continuity in the oil bearing sands encountered in the original discovery well, but we also encountered new sands structurally higher in the section. It is great to have three successes so early on in the exploration term and we are very excited about the three-well exploration program planned for the third quarter of this year. This program is expected to test three prospects which potentially are all larger than HST, including a very large basement structure."
The sidetrack appraisal well was drilled to a total depth of 3,342 meters (measured depth) and successfully penetrated the HST structure on Block 15-2/01 approximately 1.1 kilometers to the northeast of the original discovery location. The sidetrack encountered 51 meters of net oil pay at a structural elevation very similar to the discovery well. Extensive down-hole well logging and sampling has confirmed the presence and quality of the same oil bearing zones that were discovered and tested in the original HST discovery well. With this new information, Talisman and co-venturer, PetroVietnam Exploration and Production Company ("PVEP"), expect to be able to move quickly to full field development.
The HST discovery is located in Block 15-2/01, 50 miles off the east coast of Vietnam on trend with large oil and gas discoveries in the Cuu Long Basin. In January 2007, Talisman announced that the HST discovery well had tested 14,863 bbls/d of oil from a separate fault block updip and adjacent to the 2005 TGT Block 16-1 industry discovery. In March 2007, Talisman announced that the first sidetrack well from the HST discovery successfully tested oil from the Lower Miocene formation, confirming that the adjacent TGT industry discovery extends onto Block 15-2/01.
Thang Long Joint Operating Company (TLJOC), a special purpose company established for conducting all operations on Block 15-2/01, plans to commence drilling three new exploration wells in 2007 to evaluate a very exciting basement structure as well as two more of the many Miocene/Oligocene clastic prospects that are on trend with the HST discovery. Further exploration drilling is anticipated beyond 2007. Talisman holds a 60% working interest share in any commercial discoveries on Block 15-2/01 with PVEP holding the remaining 40%.
TLJOC is in the process of preparing a reserves assessment report in preparation for a project development plan. Talisman and TLJOC believe that a joint area development presents the best opportunity to maximize reserves and the economics for all parties. Discussions will be ongoing with the operators of the TGT discovery in Block 16-1.
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