Basker Manta Moves into Final Phase

Anzon Australia Limited

Anzon Australia Limited said that the Ocean Patriot drilling rig was released from the Basker Manta location on Monday.

The semisub’s departure marks the conclusion of two major phases of the Basker Manta oil project: first, the drilling of Basker-2 and its 6-month Extended Production Test (EPT) and, second, the drilling of four appraisal / development wells.

The project now moves into its third stage, with the upgrading of the floating production storage and offloading vessel (FPSO) Crystal Ocean and the crude oil shuttle tanker Basker Spirit in Singapore shipyards over the next 3 months. Concurrently, the CSO Venturer installation vessel under contract with Clough Engineering will sail to Bass Strait in August 2006 transporting the electro-hydraulic umbilicals and production flowlines. This vessel will install these umbilicals/flowlines and the subsea production manifold, which will connect all five wells to the Crystal Ocean facility.

Steven Koroknay, Anzon’s chairman, noted the significance of the completion of the first two phases. “Anzon management are very proud of the achievements of the Basker Manta project team over the past 18 months,” he said. “This predominantly Australian project with the support of the Victorian and Federal Governments, the equipment vendors, design companies, and project management contractor (Upstream Petroleum), have made this world-class fast-tracked development possible.”

The decision to conduct the EPT is vindicated by the substantial useful information gained in de-risking the project, including better understanding the reservoir performance and identifying more continuous reservoir sands supported by a water drive mechanism, which indicate that recovery efficiencies are likely to be higher than previously expected. In addition, the development drilling has identified a larger structure with both thicker oil columns and extensive gas columns. This reservoir information is presently being integrated into a reserve upgrade to be finalized by the end of this month.

Importantly, the development drilling and EPT identified sufficient gas resources, together with the undeveloped Gummy gas field and the deeper Manta Golden Beach reservoir, to warrant development of a sales gas project. The detailed feasibility of this project, including the development of a Gas Sales Agreement, is well advanced and anticipated to receive joint venture and board approvals during the coming months.

Reg Nelson, Beach Petroleum’s managing director, praised the progress of the joint venture. “Beach is impressed with the progress made in this development in such a short time,” he said. “Our increase in participation from 25 to 50% over the past 12 months is testimony to our enthusiasm with this resource, its development approach, and the effectiveness of the Anzon/Beach Joint Venture.”

Anzon said the “state-of-the-art” facilities presently being installed on the Crystal Ocean and the enhancement of the bow loading system of the Basker Spirit will enable the higher-than-forecast (at original project sanction) production rate of 25,000 bopd to be achieved, commencing October 2006. Pending the formal sanction of a gas project, the facilities have been designed to inject gas evolved from the oil back into gas reservoirs within Basker. If the gas project proceeds, the gas will be exported by a pipeline from the Crystal Ocean and an additional well will be available for oil production. At that time, additional liquids in the form of condensate extracted from the gas will further enhance the value of the project.

“The integration of technologies and best practices in subsea developments coupled with highly operable floating production facilities, setting performance benchmarks, has allowed Anzon/Beach to pioneer the first development of its kind in Bass Strait,” said Cam Rathie, managing director of Upstream Petroleum, the contract project manager and operator on behalf of the joint venture. “Additionally, Anzon Australia, a company listed just 18n months ago, is only the second operator to produce oil in the prolific Gippsland Basin next to the oil and gas major ExxonMobil.”

Anzon anticipates that, on commencement of full field development (FFD), further assessment of the oil and gas resources are likely to warrant additional drilling that may be carried out in 2007 and 2008. The joint venture is addressing the exploration potential of the blocks VIC/L-26, VIC/RL-9, and VIC/RL-10 to mature the already-identified prospects. If successful, these prospects will prolong the plateau rate from the facilities.