This well was a vertical well drilled approximately two kilometers from the original discovery well and was designed to test the extent of the oil column in the CNV Basement structure. The well encountered Basement at 3,940 meters total vertical depth (TVD) and penetrated an oil column of approximately 1,000 meters, double the oil column intersected in the original discovery well. The well appeared to still be in the oil column, with less evidence of Basement fracturing, when the well reached total measured depth at 5,068 meters (5,009 TVD). There was no evidence of formation water in the CNV-2XA well.
The CNV-2XA well, although not tested as a flowing well, confirms the original discovery and confirms that the structure is richly sourced with hydrocarbons. Additionally, the results of this well appear to demonstrate a higher reserve potential for this structure given the thickness of the oil column in this well and the fact that it encountered oil some 500 meters below that in the discovery well.
As originally planned pending success of this well, a horizontal follow up section will be drilled immediately from the upper section of this vertical well. The length of this horizontal well, which is prognosed to extend northeast toward the Rang Dong producing field, thus in the opposite direction from the original discovery well, is dependent upon the size and number of fractures intersected. The plans are to put a successful horizontal section on a long term test as the basis to declare commerciality of the CNV structure.
Additional seismic processing and interpretation is required before the Ca Ong Doi-2X well ("COD-2X") can be drilled as the planned follow up well to the COD initial exploration well. Accordingly, the rig which has been used to drill all of SOCO Vietnam's wells in the Cuu Long Basin thus far will be released after the CNV horizontal section has been drilled and tested. Current expectations are that the COD structure will be tested in the second quarter of 2004.
SOCO Vietnam holds a 25% working interest in Block 9-2 and a 28.5% interest in Block 16-1 in the Cuu Long Basin offshore Vietnam. Both Blocks are contiguous to the Bach Ho field, which is producing approximately 250,000 BOPD and 150 million cubic feet of gas per day, and the Rang Dong field, which is producing approximately 65,000 BOPD and 85 million cubic feet of gas per day.
Ed Story, President and Chief Executive of SOCO, commented: "As expected this well confirmed our confidence in the CNV structure and puts us on course for commerciality. Moreover, the extent and thickness of the oil column demonstrated in this well further supports our optimism for the adjacent COD structure which is to be drilled next year. Additionally, the oil column at depth in this well increases the prospective nature of the deeper structure on Block 16-1 which is adjacent to Bach Ho. We look forward to updating our shareholders regarding our exciting outlook in Vietnam and other significant initiatives when we present interim results on the 4th of September."
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