"Soco is well placed for continued future growth following operational success during the last year and a very active drilling program going forward on an extremely high potential project portfolio.
"During 2006 Soco continued its excellent exploration and appraisal drilling track record, with a 70% success ratio. In 2007 the Vietnam exploration drilling program has the potential to again transform the Company's reserve base. Last week Soco provided the market with an update on the Te Giac Den-1X well on Block 16-1, indicating positive initial indications with oil and gas shows and an over pressured environment in the Oligocene interval. However, it is important to recognize that the well is still at an early stage with no testing carried out as yet. The Company will update the market as and when further information is available.
"A continuous exploration and appraisal program will be conducted during the remainder of the year and development drilling and infrastructure construction will soon be underway on the Block 9-2 Ca Ngu Vang field as preparation continues for first oil in the first half of 2008.
"In Yemen, the production facilities are in the process of being expanded in anticipation of reaching 70,000 barrels of oil per day export capacity. Three rigs will be working on the Block throughout the year, with activities focusing on drilling development and injector wells to increase Basement productivity and production capability as well as delineation of the western and southern parameters of the Kharir field.
"Soco is also continuing to progress its pre-drill activities on the Company's West African portfolio. A 1,200 square kilometer 3D seismic acquisition was completed late last year and processing and interpretation are on schedule to select drilling targets in the third quarter of this year. Acquisition of 2D seismic is expected to commence later this year in both the Democratic Republic of Congo (Kinshasa) Nganzi Block and the Cabinda North Block. Expectations are that the first well on the Marine XI Block, offshore Republic of Congo (Brazzaville) will be drilled in early 2008.
"In summary, Soco is in the midst of a very active five year drilling campaign of exploration and appraisal wells, across Vietnam, West Africa and Yemen, with two new field developments expected on-stream within the next 36 months. This year is shaping up to be another milestone for the Company as it targets significant further reserves expansion and prepares for first production from Vietnam in 2008."
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