SOCO Says TGV-1X Not a Significant Discovery

SOCO says the first exploration well on the 'L' prospect, on Block 16-1 in the Cuu Long Basin offshore Vietnam, Te Giac Vang 1X (TGV-1X), spudded on 2 May, reached a total measured depth of 3,926 meters in the Upper Oligocene. The well was deepened from its original prognosis due to the presence of encouraging hydrocarbon shows continuing below the original target depth. It was primarily positioned to test a closure at the Miocene Lower Bach Ho 5.2 ('LBH 5.2') level, the main productive horizon at the Te Giac Trang (TGT) discovery approximately 40 kilometers to the north.

The well intersected a clastic sequence at the LBH 5.2 horizon, however the reservoir sands were poorly developed at the location and no pay was encountered. The sediments encountered suggest that the well was located outside the LBH 5.2 play fairway and that this fairway is to the north and west of the TGV-1X location.

The well was also drilled into the Oligocene; however, the location was downdip on the flank of the structure. Despite being in a flank position, good oil shows were encountered in several sands. After analysis of the logs, although the sands were confirmed to be hydrocarbon bearing, it appeared that these lacked sufficient permeability to produce at commercial rates and were therefore not tested.

The well results will be evaluated and the seismic re-interpreted prior to drilling a follow up well to fully test the Oligocene in a more prospective up-dip position.

The well also penetrated the source rock section at the top of the Oligocene validating the geological interpretation and confirming the potential of the deep Oligocene and Basement prospect underlying the shallower closures.

The Atwood Beacon will be moved immediately to drill the sidetrack to the CNV-4X well on Block 9-2 that was temporarily suspended after encountering unexpected high pressures in the Oligocene sequence above the Basement. The well is expected to take approximately 60 days to drill. Following this well a new drilling campaign on the play fairway will commence in mid-late September with the arrival of Transocean's Trident 9 jackup. Ed Story, President and Chief Executive of SOCO, commented: 'Although the TGV-1X well did not result in another significant discovery, we did encounter oil in the Oligocene and will follow up with another well on the TGV structure to evaluate the Oligocene in a better location. The Cuu Long Basin is a wonderful place to conduct exploration activities. Rich source rock coupled with multiple potential reservoirs greatly improves the probability of success. Ahead of the next exploration drilling on Block 16-1 in the third quarter of this year, we can focus on the required reserve assessment report and development studies, which we expect will lead to a Declaration of Commerciality of TGT in the near future.'

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