Roc Oil Reports Record Oil Prices, Production Over 10,000 BOEPD
On June 16, 2008, ROC announced its proposed merger with Anzon Energy Limited and its off-market takeover offer for Anzon Australia Limited. If successful, ROC's business and future growth profile will be transformed, with 2P Reserves increasing by over 135% and 2008 production expected to increase to approximately 14,000 BOEPD. The Company's operating cash flow will be significantly increased during a time of record oil prices and ROC will be exposed to upside reserves potential through further development of the Basker Manta Gummy fields in Bass Strait, offshore Victoria.
ROC's development and production operations continue strongly, with record oil prices and YTD production of over 10,000 BOEPD, in line with previous estimates, generating YTD sales revenue of US$179 million.
Progress on the Zhao Dong development project in Bohai Bay, offshore China, has been excellent in a challenging industry environment. The project remains on schedule for first oil from the C4 Oil Field and Extended Reach Area ("ERA") of the C & D Oil Fields in 4Q 2008, while development drilling on the C & D Oil Fields successfully returned gross production to approximately 20,000 BOPD at Quarter end.
During the Quarter, exploration drilling results from the Cabinda South Block, onshore Angola, were mixed, with the Coco well, which targeted deeper pre-salt plays, intersecting two hydrocarbon bearing sands. However, drill stem testing on the well was not conclusive and further testing of the well is being planned for late 2008/early 2009.
Subsequent to the end of the Quarter, the Sesamo exploration well reached Total Depth of 3,013 mBRT and wireline logging was completed. The well confirmed the presence of the targeted pre-salt reservoir sands. However, with no hydrocarbon shows, the well will be plugged and abandoned as a dry hole.
While we are experiencing a period of volatility in commodity and equity markets, the events and results during the Quarter have continued to move the Company towards achieving ROC's stated goal of establishing a substantial reserve base and sustainable production revenue through a diversified portfolio.
CONSOLIDATED REVENUE & PRODUCTION
- Total working interest production of 0.86 MMBOE (9,399 BOEPD), 98% oil; down 14% compared to 1.0 MMBOE (10,961 BOEPD) in the previous quarter due to a combination of natural production decline and minor operational constraints on a number of ROC's producing fields.
- Sales volumes of 0.63 MMBOE; down 44% compared to of 1.12 MMBOE in the previous quarter due to timing of sales and lower production as outlined above. During the Quarter, ROC's net underlift position for its production assets increased by 0.18 MMBBL to a total of 0.25 MMBBL at 30 June 2008.
- Total sales revenue of US$77.1 million; down 24% compared to US$101.7 million in the previous quarter.
- Average realised oil price in the Quarter of US$122.64/BBL; up 35% compared to US$91.17/BBL in the previous quarter.
- Cliff Head Oil Field, WA-31-L, Offshore Western Australia (ROC: 37.5% & Operator)
- Gross oil production averaged 6,641 BOPD (ROC: 2,490 BOPD); down 17% on the previous quarter due to expected field decline and trucking constraints during June. During the Quarter, preparations continued for two well workovers planned for 3Q 2008 to replace existing electric submersible pumps with larger pumps with the objective of increasing oil production.
- Zhao Dong C & D Oil Fields, Bohai Bay, Offshore China (ROC: 24.5% & Operator)
- Gross oil production averaged 17,155 BOPD (ROC: 4,203 BOPD); 10% lower than the previous quarter. The initial phase of the 2008 development drilling programme was completed with four new wells and two workovers involving well recompletions brought on production in June 2008. Following start-up of production from these wells, gross production from the C & D Oil Fields increased to approximately 20,000 BOPD at Quarter end.
- Enoch Oil and Gas Field, North Sea (ROC: 12.0%)
- Gross production averaged 5,609 BOPD and 2.8 MMSCFD (ROC: 673 BOPD and 0.3 MMSCFD); down 23% compared to the previous quarter. During the Quarter, production was interrupted for a period of approximately two weeks as a consequence of downstream processing constraints resulting from an industrial dispute at the Grangemouth onshore processing facility.
- Blane Oil Field, North Sea (ROC: 12.5%)
- Gross production averaged 13,482 BOEPD (ROC: 1,685 BOEPD); down 15% compared to the previous quarter. While field production capacity remains close to the field's initial plateau production rate, production was down during the Quarter due to a number of planned downtime events including approximately 13 days shut down for the works on the Ula platform and drilling rig movements.
- Chinguetti Oil Field, PSC Area B, Offshore Mauritania (ROC: 3.25%)
- Gross oil production averaged 8,844 BOPD (ROC: 287 BOPD); down 19% on the previous quarter due to natural field decline. Planned well intervention work was completed on 9 June, following which the C-19 infill development well commenced drilling. The well reached planned Total Depth of 3,570 meters on June 28, 2008.
Subsequent to the Quarter the C-19 infill development well in the Chinguetti Oil Field, offshore Mauritania was completed as a production well and is currently waiting clean up flow testing to the rig prior to tying into the production facilities on the Berge Helene FPSO and being put into production.
The aeromagnetic survey in the Belo Profond Block, offshore Madagascar was completed on July 17, 2008, three days ahead of schedule and within budget. A total of 43,102 line kilometers of data were acquired.
The Sesamo-1 exploration well in the Cabinda South Block, Onshore Angola, located approximately 20km east of the Coco-1 discovery, reached a Total Depth of 3013 mBRT and logging on the well was completed on July 26, 2008. Although confirming the existence of the pre-salt target reservoir sands, the well is being plugged and abandoned following final wireline logging with no hydrocarbon shows. The Simmons 80 rig will move 12km southwest to the final well in the current seven-well exploration program, Arroz-1, which will also test a pre-salt target.
ROC is currently finalizing construction of the drilling sites for the appraisal drilling program of up to six shallow wells on the Massambala Heavy Oil Discovery which will assist in better defining volumetric potential. Drilling is scheduled to commence late August 2008 and is expected to last approximately 60 days.
In respect of the Zhao Dong developments, the Pipeline Terminal ("PT") has been successfully installed and the legs have been welded out. The PT flare and bridge connection to the Conductor Pod have been lifted and installed. The straight run water line between PT and Zhao Dong has been successfully completed. The project remains on schedule for first oil production in 4Q 2008.