Pacific Rubiales Farms-In to Bilby Well Offshore Brazil

Pacific Rubiales Energy has exercised its option to acquire a 35-percent interest in Block S-M-1166 located in the Santos Basin offshore Brazil. The block is held by Karoon Gas Australia Ltd. (Karoon) and Pacific will exercise its right to acquire a stake through the funding and participation in the Bilby-1 exploration well.

This marks the third exploration well within the Karoon blocks that Pacific has participated in, following the Kangaroo-1 and Emu-1 wells.

As for the Bilby-1 well, Pacific will complete the minimum work commitments required to retain a stake in all five blocks (S-M-1037, -1101, -1102, -1165 and -1166) and request operatorship of the project. The transaction is subject to regulatory approval.

"Although we are in early exploration stages, we are pleased with the results to date and our partnership with Karoon," said Ronald Pantin, CEO of Pacific Rubiales, in a statement. "Our first well, Kangaroo-1, discovered oil in an Eocene structure and we are looking forward to following up with an appraisal well as soon as a suitable drilling rig can be sourced and mobilized to the Kangaroo-2 location."

Karoon spud the Kangaroo well in December 2012 using the Blackford Dolphin (mid-water semisub). Currently, the rig is drilling the Emu-1 well and it is expected that Karoon will use the same rig to drill the Bilby-1 well.

The Emu-1 well in the Santos Basin reached total depth with initial wireline results showing the main objective to be water bearing, said Tudor Pickering & Holt in a March 28 analyst report.

"It does not change our view on geological chance of success in the basin."

It is estimated that Bilby, situated in a water depth of 1,320 feet, contains a potentially significant sized Eocene accumulation with multiple targets at several geological levels, including the Santonian, Campanian, Maestrichtian, Eocene and Miocene. The well is expected to reach total depth in 2Q.

Karoon currently holds 100 percent interest in the Santos Basin Blocks.


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