Rift Hits Pay in Papua New Guinea

Rift Oil PLC

Rift Oil PLC on Tuesday released an update on its Douglas Drilling Program in western Papua New Guinea.

On May 26, 2006, the company drilled to the target depth of 1,978 meters and has now had the opportunity to analyze the drilling results. Rift said that it has since made a gas discovery.

. “The Douglas-1 discovery has found potentially significant reserves of gas in a large structure with a maximum area of over 40 square kilometres,” stated the company in a written announcement. “It has also de-risked other similar looking prospects and leads on the license (PPL235). It is our intention to proceed with a detailed feasibility study to determine a commercialization strategy for this resource.”

Although Rift initially considered conducting further tests on the drilled well, the “excellent” multi-formation tester (MFT) results indicate that there are two reservoirs (Alene and Toro) of sweet gas with good deliverability and likely moderate condensate content. Because further testing would reveal no other significant factors, the company deemed it inappropriate to proceed with such tests.

“In order to identify the extent of the reserves we need to improve our knowledge of the remaining large structures on the license,” the company continued. “We have to pinpoint the best place to drill the next well to maximize the return on our investment. This will be best achieved by fulfilling our existing commitment to undertake 50 kilometers of new 2D seismic acquisition before August 2007 as stated under the terms of the license. Logistically, this is best carried out between September and November 2006.”

Because the joint venture will not need the drilling rig again until after the seismic study has been completed and analysed, it is reviewing third-party proposals to utilize the rig during this intervening period to generate revenue for Rift.

Rift said that its audited results for the year ended March 31, 2006, will be announced in late-August 2006.