Bengal announced its financial and operating results for the first fiscal quarter of 2011.
Bengal is moving forward with the exploration and drilling of its large inventory of both low risk and high impact onshore and offshore opportunities on 2.3 million net acres of undeveloped land in India and Australia.
In June 2010, Bengal signed its second Production Sharing Contract ("PSC") with the Government of India, turning the provisional award of offshore block CY-OSN-2009/1 in India's Cauvery Basin into a formal agreement. Bengal's wholly-owned subsidiary, Bengal Energy International Inc., had been named provisional winner of the 340,000 acre block at the New Exploration Licensing Policy bid round in New Delhi, India in October 2009. Bengal is the operator and has a 100% working interest in the block.
Bengal will acquire 310 line kilometers of 2D seismic data and 81 square kilometers of 3D seismic data during the first four years of the seven year exploration phase. Drilling is required after the first four years in order to retain the block. The Company has identified a structure approximately 18,000 acres in size on existing 2D seismic that will be further evaluated through the committed geoscience work program. The block is subject to favorable fiscal terms including 100% cost recovery and a seven year tax holiday from the start of commercial production.
The year one work program for Bengal's onshore Cauvery basin block CY-ONN-2005/1 commenced in the quarter involving the acquisition of an aeromagnetic survey, reprocessing of existing 2D seismic and planning and design of a 3D seismic acquisition program for later in the fiscal year.
Production from Bengal's oil discovery on Authority to Prospect ("ATP") 752P ("the permit") in Australia's Cooper Basin commenced in May 2010. The well is producing clean oil at 52 degree API which is being trucked to the Jackson facility and then pipelined to Port Bonython near Adelaide. Bengal and its joint venture partners have acquired and interpreted over 300 km2 of 3D seismic data. Locations are being finalized and partner approvals are being sought to commence drilling up to three wells starting in the fourth quarter of this calendar year. Bengal's working interest is expected to increase in the Barta Block of ATP752P to 25% after contributing 55% of the cost to drill the next earning well. Bengal will then be fully carried on up to two additional exploration wells on the permit.
Geoscience work is also progressing on Bengal's other onshore and offshore blocks in Australia to accelerate play and prospect identification and future drilling locations.
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