Rocksource Makes Headway in 2011 Drilling Program

Rocksource has now announced the drilling results from three of its five, 2011 exploration wells. Initial results show one discovery (Norvarg) and two dry holes at wells drilled to test unproven petroleum systems (Breiflabb and Kora). Wells four and five in the 2011 program are expected to spud in September.


In June Rocksource announced a gas discovery in the Norvarg prospect in the Barents Sea license PL 535, operated by Total E&P Norge AS. On Norvarg Rocksource's Electromagnetic (EM) technology successfully identified the stacked hydrocarbon reservoirs present within the structure. It is too early to conclude on flow rate characteristics; hence the partnership has decided to perform a production test to gather information about reservoir production properties. Well operations are still ongoing with the planned well test to commence shortly.The test results are expected in early August.


Earlier in July Rocksource announced a dry well on the Breiflabb prospect in license PL 416 in the Norwegian part of the North Sea. The Breiflabb prospect was characterized by a weak EM anomaly and was estimated to have a pre drill chance of success of 44 percent. The false positive response (EM anomaly not associated with hydrocarbon) is believed to have come from deeper levels that were not penetrated by the well.


The Kora-1 well in offshore Senegal and Guinea Bissau was on July 27 announced as unsuccessful. The Kora prospect had an EM anomaly interpreted by Rocksource to be associated with hydrocarbons with an approximate 50 percent chance of success. The prospect was found dry and the strong EM anomaly is believed to have been caused by a combination of lithologies (rock types) which have combined to produce unusually high resistivity. Although these lithologies were not specifically predicted pre-drill, given the lack of well control in this frontier area it was accounted for in Rocksource's prospect risking. Rocksource recently farmed down half of its interest in AGC Profond receiving as an initial consideration, USD 28 million in promoted contribution towards past expenditure and the costs of the Kora-1 well.

Commenting on the drilling results so far Chief Technology Officer John Howell said, "The average chance of success in our 2011 drilling campaign is approximately 50 percent. When you drill five wells with 50 percent chance of success, you should expect two to three discoveries and two to three dry holes. Although we would have liked more discoveries early, we believe we can still deliver a successful drilling campaign and we are looking forward to the results from the two remaining wells this year, and to test the further potential in our extensive exploration portfolio in 2012 and beyond."


The final two wells in 2011, will test the Heilo (PL 530) and Phoenix (PL559) prospects on the NCS. Both are expected to spud in September. Both wells are within proven petroleum systems and are on trend with earlier oil discoveries.


PL 530 which includes the Heilo prospect is located in the Barents Sea on trend with the Goliat discovery to the west and the Nucula discovery to the southeast. The license which is operated by GDF Suez was reported to be the most sought after block in the Norwegian 20th Licensing Round. Rocksource carries a mean volume estimate of 200 mill boe and a chance of success of approximately 50% for the Heilo prospect. A success in the initial target will trigger a sidetrack to allow further efficient appraisal of the structure.


PL 559 which includes the Phoenix prospect was Rocksource's highest priority application in the Norwegian APA 2009 license round and is located on the Nordland Ridge, immediately to the east of the Norne, Urd, Falk and Linerle fields. Prospectivity within the license consists of three main prospects and several leads. All three prospects have encouraging EM responses. Rocksource carries a mean volume estimate of 160 mill boe for the Phoenix prospect and a chance of success of approximately 50%.

In parallel with the ongoing drilling operations Rocksource is continuing to mature EM positive prospects towards drilling decisions, and expect to firm up wells for drilling in 2012 and beyond throughout the remainder of the year.