Kulczyk Oil has provided an operational update for its seismic and upcoming drilling activities in Brunei and Syria.
Kulczyk Oil, through a wholly-owned subsidiary, owns a 40% interest in a Production Sharing Agreement ("PSA") which gives it the right to explore for and produce oil and gas from Block L, a 2,200 square kilometer (550,000 acre) exploration and development area covering onshore and offshore areas in the northeastern portion of the Sultanate of Brunei Darussalam ("Brunei"). The offshore component is in relatively shallow waters, and includes a seven kilometre wide strip along the northwest coast and essentially all of Brunei Bay to the east. The giant Seria oil field, which has produced in excess of 1 billion barrels of oil, lies approximately 12 kilometers to the southwest of Block L. A significant gas discovery at Bubut, announced by Brunei Shell Petroleum, lies less than one kilometer from the edge of Block L in the shallow offshore region.
A 350 square kilometer 3D seismic acquisition program, which will assist with the evaluation of the potential of the southwestern portion of the block nearest to the Seria field, was completed on May 8, 2009. The initial results from the processing of the field data indicate excellent quality data have been obtained. Interpretation of these data will be ongoing as processed information is received over the next several months. Under the terms of the PSA, Kulczyk Oil and its partners are committed to the drilling of two wells on Block L. A decision on drilling locations is expected in September followed by drilling of the first exploration well by Kulczyk Oil et al which currently is scheduled for December 2009.
Through a wholly-owned subsidiary, Kulczyk Oil owns a 100% interest in a Contract for the Exploration, Development, and Production of Petroleum ("PSC") between the Government of the Syrian Arab Republic, Syrian Petroleum Company ("SPC") and the Company which became effective on November 29, 2007. This agreement gives Kulczyk Oil the right to explore for and produce oil and gas from Block 9, a 10,040 square kilometer block in northwestern Syria. Under the terms of the PSC, the Company is committed to acquire 600 kilometers of new 2D seismic data, or a comparably-priced 3D program, and drill two wells during the first four year exploration period.
Kulczyk Oil reprocessed approximately 1,800 kilometers of previously-shot 2D seismic data in late 2008 and the interpretation of these data, which is essentially completed, indicates a number of potential drilling targets in the southeastern corner of the block, the area that had been considered the primary area of focus on Block 9 by the Kulczyk Oil management team.
Kulczyk Oil is currently in the process of converting the 2D seismic acquisition portion of its work obligation into a comparably-priced 3D seismic program. A letter advising SPC of the intention of the Company to acquire 350 square kilometers of 3D seismic in place of the 600 km 2D seismic commitment was sent to SPC during the first week of May.
Planning for the acquisition of a 3D seismic program is in its initial stages and an environmental impact assessment, required under the terms of the PSC, has been initiated. Work on the invitation to tender has also commenced with the current target timing for the shooting of the new seismic program being the first quarter of 2010.
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