LNG Energy Completes Sling Seismic Program

LNG Energy announced Thursday the successful completion of the 2011 "Sling" 2D seismic program on its 100 percent held PPL 319 license, onshore Papua New Guinea.

PPL 319 is in the lowland area of the Papuan fold and thrust belt between several substantial oil and gas fields and is on-trend with Oil Search's Kutubu and Gobe producing oil fields. Ninety-one miles (148 kilometers) of 2D data was acquired during the periods April-June and October-December 2011, with interpretation in early 2012. The survey comprised 41 miles (67 km) of alluvial river flats around the Kikori River, 36 miles (59 kilometers) of karst limestone and 13 miles (22 kilometers) of volcanic terrain.

PPL 319 contains proven, mature Late Jurassic (Kimmeridgian) Lower Imburu Fm. source rocks that are presently generating hydrocarbons from local kitchen areas. It is believed that PPL 319 contains clastic reservoirs of Lower Cretaceous-Upper Jurassic age (Toro-Hedinia-Iagifu sandstones), particularly in the western part and the Kikori Bend area of the PPL 319 License. The company believes the presence of source, seal, reservoir and structural traps on PPL 319 are extremely prospective in this proven hydrocarbon trend.

There has been little exploration activity in PPL 319 over the 20 years prior to its acquisition by LNG, despite the prospective location of the license. In 2010, LNG undertook a HRAM/AIRGrav survey, flown by Sander Geophysics Ltd that, among other structures, identified a large structure between PPL 319 and InterOil's PPL 237. This structure was subsequently confirmed by the 2010 2D Poroman seismic survey on the eastern boundary of PPL 319.

This aeromagnetic/gravity survey and the reprocessed Base Resources 1988 Victory Junction seismic data identified another prospective area referred to by LNG as the "Kikori Bend" area near the western part of PPL 319, on trend with the Gobe oil field. The 2011 Sling seismic survey was undertaken over the entire western section of PPL 319 including the Kikori bend area and clearly identified the Tuyuwopi prospect.

The extensional fault related prospects identified at Kikori Bend are early rift-related structures that exhibit little late stage structural movement. These preserved extensional traps have increased longevity and the proven Jurassic source rocks are in the oil window in this area. The traps are believed to have been charged early as oil was generated, have good top seals and are less likely to be affected by late stage uplift or subsequent gas charge. LNG believes the reservoir will be oil charged and is undertaking a detailed analysis of the traps identified. As with many PNG discoveries, LNG anticipates multiple pay zones in the sandstone reservoirs of Lower Cretaceous-Upper Jurassic age.

Logistically, PPL 319's Kikori Bend area is strategically placed in the lowlands with river, road and helicopter access. It is in close proximity to Oil Search's existing crude export pipeline and the Exxon LNG Gas line (www.pnglng.com) which traverse part of PPL 319. Also within PPL 319 is Kopi base, a hub for Exxon and Oil Search's oil and gas development activities. In a country where logistics often define economics, PPL 319 and specifically the Tuyuwopi prospect are favorably situated.

"The Sling seismic program has identified the very attractive Tuyuwopi prospect. Given the location and surrounding hydrocarbon production trends, we are very encouraged by this target and are developing our work program around it," said Dave Afseth, President and CEO. "Additional leads have also been identified that will be further investigated."