Roc Oil Reduces Production at Zhao Dong Block
Roc Oil says gross production from the C and D fields has been pared back from about 30,000 barrels of oil per day ("BOPD") to 22,000 BOPD. This is a result of the fields' excellent performance during 2006 with recent daily gross production far exceeding the production level originally approved by the Government. The Government's requirement that all production rates should strictly adhere to the approved Development Plan has resulted in both fields being temporarily subject to constrained production rates.
ROC and its co-venturers, including PetroChina, which holds a 51% interest in the Zhao Dong Block, are currently discussing the Annual Production Forecast for 2007 in order to ensure that it appropriately reflects the fields' productive capabilities. In the meantime, a proposal to expand the production capacity of the fields is being prepared for Government consideration so that production may be restored to a higher level.
The temporary reduction of production at Zhao Dong will not cause ROC to lose any reserves but rather it will defer a small portion of the Company's production to a later stage of the fields' lives. Although in the immediate term ROC's net production from Zhao Dong will be reduced by almost 2,000 BOPD, possibly until end-2006, ROC's company-wide production will reduce by about 1,000 BOPD due to a partially offsetting recent increase in production at the Cliff Head Oil Field, offshore Western Australia.
Commenting on the situation, ROC's Chief Executive Officer, Dr. John Doran, stated:
"Western oil companies don't often come across the concept that oil production may need to be temporarily reduced because a field has out-performed expectations. In fact, we are much more familiar with situations where production is reduced because a field has under-performed. ROC greatly values its developing relationship with PetroChina and it fully recognizes, that the Government has specific planning criteria which need to be reflected in the late 2006 production profile at Zhao Dong."
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