Bligh Oil To Begin Exploration Offshore Southwest China

Bligh Oil of Australia has reached an agreement three other Australian companies to join Bligh in the drilling of the Wei 6-12-1 exploration well on Block 22/12, located in the Beibu Gulf, offshore southwest China. Bligh will retain a 40% interest in the Block and will be operator.

The well will be drilled to an initial depth of 5,741 feet, under the terms of a turnkey contract with CNOOC Services Ltd, using the Nanhai IV jackup rig, which is expected on location during the second half of February. The cost of the well is expected to be approximately US $4 million.

The 6/12-1 prospect is an untested structural closure, defined by 3D seismic control, which is located approximately 6 miles east of the 12/1-1 producing field complex, and less than 3 miles from existing accessible pipeline facilities. Mean potential reserve estimates are in excess of 100 million barrels of oil, with the primary target being the Weizhou formation, anticipated in the interval from 4,593 feet-5,741 feet. A number of oil discoveries already exist on the Block, some of which are also candidates for future development.

The partial assignment of 60.00% of Bligh's interest in the Block to its intended partners is contingent upon the approval of the assignment by the China National Offshore Oil Corporation (CNOOC), and the completion of the formal documentation between Bligh and its partners.