Kulczyk and its joint venture partners in Block L in Brunei Darussalam ("Block L JV") have elected to proceed with the Phase 2 exploration program under the terms of the Block L production sharing agreement ("Block L PSA").
The Phase 2 exploration program is for a term of two years commencing August 28, 2010 and the minimum work obligations are:
The Block L JV is obligated to expend a minimum of $16 million during Phase 2.
Under the terms of the Block L PSA, the Block L JV was granted the right to explore for and, in the event of hydrocarbon discovery and subject to the approval of PetroleumBRUNEI, produce oil and natural gas from Block L. As a part of the Phase 1 exploration commitments the Block L JV has: (i) interpreted more than 1,500 kilometres of 2D seismic data; (ii) acquired 350 square kilometres of 3D seismic data; (iii) drilled the first exploration well at Lukut-1 (currently awaiting testing); (iv) acquired an aerial gravity/magnetic survey; and, (v) commissioned a geological study of the area. The second exploration well on Block L, being drilled as a part of the Phase 1 exploration program, is currently drilling at Lempuyang-1.
"The decision to move forward with Phase 2 reflects our optimism about the potential of Block L. It is a large block within a prolific petroleum system with virtually no exploration work undertaken for decades prior to the award of the block in 2006. Opportunities like this are not common and we are excited about the potential of the area." said Jock Graham, Executive Vice President of Kulczyk Oil.
The partners in Brunei Block L are Kulczyk Oil Brunei Limited (40%), AED South East Asia Limited (50%), and QAF Brunei Sdn Bhd (10%). Kulczyk Oil Brunei Limited is a wholly-owned subsidiary of Kulczyk Oil.
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