SOCO Drills Dry Hole Offshore Vietnam
SOCO International plc said Friday that, after encountering reservoir sands, the first exploration well on the Te Giac Xang ("TGX") structure on Prospect "K" will be plugged and abandoned as initial analysis indicates that it was not drilled within structural closure. Full analysis of logs and other data will take several weeks to complete. Prospect "K" is a subtle closure to the west of the higher amplitude Te Giac Trang ("TGT") structure. The seismic over the area will be reprocessed and remapped to better define the structure for a possible second well.
Located in a previously untested portion of the Clastics fairway on Block 16-1, the TGX-1X well was drilled to a depth of 3,506 meters. Finding reservoir is the main risk in drilling in this fairway, so the presence of reservoir in TGX-1X is a positive indicator for future success as drilling locations step out from the initial discovery. As has been the case on every well drilled in the Clastics fairway by the Hoang Long Joint Operating Company ("HLJOC"), having oil sourced was not an issue.
To date, the HLJOC has had a 50% success rate in exploration/appraisal wells drilled in the fairway on Block 16-1, with discoveries ranging from 9,340 barrels of oil equivalent per day ("BOEPD") to 17,500 BOEPD and a declaration of commerciality is expected early in 2007 on the TGT field. Hoan Vu JOC is proceeding to development on the Ca Ngu Vang field on Block 9-2.
The rig will finish logging this well and rig down as soon as weather permits to move to the "H2" fault block on the TGT structure where it will spud the TGT-5X well. Another rig is under contract to begin drilling in the first or second quarter of 2007. A letter of intent has been signed for a third rig and contract negotiations have begun. The rig under contract and the rig expected to be contracted are for one firm, plus one optional year of drilling.
Ed Story, President and Chief Executive of SOCO, commented:
"Although this well was not a commercial discovery, we did gain some positive encouragement for further exploration in the 16-1 fairway as far as reservoir development and oil source are concerned, moving away from the initial discovery. Accordingly, our view on resource potential is not impacted, but the well results reinforce the risk profile of exploratory drilling, even in an excellent setting. We will further refine our seismic to improve trap definition as we carry out a continuous drilling program for the next fourteen months."
SOCO holds its interests in Vietnam, all in the Cuu Long Basin offshore, through its 80% owned subsidiary SOCO Vietnam Limited (SOCO Vietnam) and through its 100% ownership of OPECO, Inc.. SOCO Vietnam holds a 25% working interest in Block 9-2, which is operated by the Hoan Vu Joint Operating Company ("HVJOC")and holds a 28.5% working interest in Block 16-1, which is operated by the Hoang Long Joint Operating Company ("HLJOC"). OPECO, Inc. holds a 2% interest in Block 16-1.
SOCO is an international oil and gas exploration and production company, headquartered in London, traded on the London Stock Exchange and a constituent of the FTSE 250 Index. The Company has interests in Vietnam, Yemen, Thailand, the Republic of Congo (Brazzaville) and the Democratic Republic of Congo (Kinshasa) with production operations in Yemen.
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