On June 16, 2008, ROC announced its proposed merger with Anzon Energy Limited and its off-market takeover offer for Anzon Australia Limited. If successful, ROC's business and future growth profile will be transformed, with 2P Reserves increasing by over 135% and 2008 production expected to increase to approximately 14,000 BOEPD. The Company's operating cash flow will be significantly increased during a time of record oil prices and ROC will be exposed to upside reserves potential through further development of the Basker Manta Gummy fields in Bass Strait, offshore Victoria.
ROC's development and production operations continue strongly, with record oil prices and YTD production of over 10,000 BOEPD, in line with previous estimates, generating YTD sales revenue of US$179 million.
Progress on the Zhao Dong development project in Bohai Bay, offshore China, has been excellent in a challenging industry environment. The project remains on schedule for first oil from the C4 Oil Field and Extended Reach Area ("ERA") of the C & D Oil Fields in 4Q 2008, while development drilling on the C & D Oil Fields successfully returned gross production to approximately 20,000 BOPD at Quarter end.
During the Quarter, exploration drilling results from the Cabinda South Block, onshore Angola, were mixed, with the Coco well, which targeted deeper pre-salt plays, intersecting two hydrocarbon bearing sands. However, drill stem testing on the well was not conclusive and further testing of the well is being planned for late 2008/early 2009.
Subsequent to the end of the Quarter, the Sesamo exploration well reached Total Depth of 3,013 mBRT and wireline logging was completed. The well confirmed the presence of the targeted pre-salt reservoir sands. However, with no hydrocarbon shows, the well will be plugged and abandoned as a dry hole.
While we are experiencing a period of volatility in commodity and equity markets, the events and results during the Quarter have continued to move the Company towards achieving ROC's stated goal of establishing a substantial reserve base and sustainable production revenue through a diversified portfolio.
CONSOLIDATED REVENUE & PRODUCTION
Subsequent to the Quarter the C-19 infill development well in the Chinguetti Oil Field, offshore Mauritania was completed as a production well and is currently waiting clean up flow testing to the rig prior to tying into the production facilities on the Berge Helene FPSO and being put into production.
The aeromagnetic survey in the Belo Profond Block, offshore Madagascar was completed on July 17, 2008, three days ahead of schedule and within budget. A total of 43,102 line kilometers of data were acquired.
The Sesamo-1 exploration well in the Cabinda South Block, Onshore Angola, located approximately 20km east of the Coco-1 discovery, reached a Total Depth of 3013 mBRT and logging on the well was completed on July 26, 2008. Although confirming the existence of the pre-salt target reservoir sands, the well is being plugged and abandoned following final wireline logging with no hydrocarbon shows. The Simmons 80 rig will move 12km southwest to the final well in the current seven-well exploration program, Arroz-1, which will also test a pre-salt target.
ROC is currently finalizing construction of the drilling sites for the appraisal drilling program of up to six shallow wells on the Massambala Heavy Oil Discovery which will assist in better defining volumetric potential. Drilling is scheduled to commence late August 2008 and is expected to last approximately 60 days.
In respect of the Zhao Dong developments, the Pipeline Terminal ("PT") has been successfully installed and the legs have been welded out. The PT flare and bridge connection to the Conductor Pod have been lifted and installed. The straight run water line between PT and Zhao Dong has been successfully completed. The project remains on schedule for first oil production in 4Q 2008.
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