SOCO Overviews South East Asian & African Operations
SOCO has presented its Interim Management Statement for the period from July 1, 2008 to November 4, 2008.
- Further exploration and appraisal success in Vietnam.
- Two projects commence production, in Vietnam and Thailand.
- Strong cash position further underpinned by production revenues.
SOUTH EAST ASIA
Vietnam, Block 16-1
During the period, the Hoang Long Joint Operating Company ("HLJOC"), operator of Block 16-1, drilled another successful appraisal well in the Te Giac Trang ("TGT") field, and completed the second of two planned drill stem tests ("DSTs") on the Te Giac Den ("TGD-1X-ST1") discovery well on Prospect "E," which recovered black oil, condensate and gas.
In the two TGD tests the well encountered approximately 120 meters of good oil and gas shows in a combined gross interval of 570 meters. Permeability and porosity were preserved and compared favorably with pre-drill estimates. The tests confirmed the presence of a working hydrocarbon system in a high pressure environment necessary to recover hydrocarbons at these depths. Following finalization of the High Pressure/High Temperature appraisal area, in which the "E" prospect is located, the HLJOC plans to reprocess and then reinterpret the seismic previously acquired over the area prior to drilling a well.
Following completion of the TGD test, the rig moved to drill the TGT-7X appraisal well on a previously untested fault block, designated H3N, within the TGT field. The well flowed at a combined maximum rate of approximately 8,100 barrels of oil per day ("BOPD") from two DSTs. The TGT-7X well was drilled to improve knowledge of the reservoir distribution.
To date, seven exploration/appraisal wells have been drilled in the TGT field, with an average oil and gas flow of approximately 11,300 barrels of oil equivalent per day from each well. The TGT field reserve assessment report received approval from the Vietnam Government in April 2008 and the field was subsequently confirmed as a Commercial Discovery under the Petroleum Contract. The Outline Development Plan was approved by Petrovietnam in September. Government approval for the TGT Field Development Plan is anticipated in late 2008.
The first flow of crude oil and wet gas from the Ca Ngu Vang field ("CNV") occurred on July 25, 2008. Four development wells are now producing in the CNV field, a fifth well is currently being drilled, and Hoan Vu Joint Operating Company is evaluating and determining further drilling locations for additional development wells in the fractured Basement reservoir. The field is expected to be in production for the next 20 years. Oil production is expected to be between 10,000 to 20,000 BOPD and wet gas production to be between 25 to 50 MMSCFD.
Hydrocarbons from the CNV field are transported via a 25 km subsea pipeline system to Bach Ho's processing facilities. Crude oil is processed, stored in a Floating Storage and Offloading vessel and then sold on the open market. Wet gas separated offshore is transported to an onshore gas facility for further distribution to meet domestic demand of natural gas, LPG and condensate.
Thailand, Bualuang field
First production of crude oil from the Bualuang oil field in Block B8/38, in the Gulf of Thailand, occurred on 27 August 2008. SOCO's 99.9% owned Thailand subsidiary, SOCO Exploration (Thailand) Co. Ltd., holds a 40% interest in the field, following a farm-out.
Following successful hook up and commissioning of the Rubicon Vantage Floating Production Storage & Offloading vessel ("FPSO"), production from the field began from well BA-05. After a period of multi-rate testing of this well, the other producers were brought on-stream sequentially over the subsequent days. In total, six development wells have been drilled on the field, five producers and one water injector. Oil is processed and stored in the Rubicon Vantage FPSO vessel prior to onward sale.
The joint venture partners plan to test the remaining potential within Block B8/38, including the undrilled east flank of the field as well as analogous structures elsewhere in the production license area.
AFRICA, Republic of Congo (Brazzaville)
SOCO Exploration and Production Congo S.A. ("SOCO EPC") is finalizing the terms of a rig contract for a two well drilling program in the Marine XI Block that is expected to commence in the first half of 2009.
In September, the Company announced that its subsidiary, SOCO EPC, entered into a farm-in agreement to acquire a 29.4% working interest in the Marine XIV Block, offshore the Republic of Congo (Brazzaville), from PA Resources Congo SA. SOCO EPC will become the operator of the Block; PA Congo will retain a 12.5% interest and the national oil company, Societe Nationale des Petroles du Congo, will have a 15% carried interest. The remaining interests will be held by fellow farm-in participants and SOCO's Marine XI joint venture partners, Raffia Oil SARL (21.55%) and a subsidiary of Lundin Petroleum (21.55%).
The Marine XIV Block is located in the Lower Congo Basin in shallow water, adjacent to the Company's Marine XI Block, and will complement SOCO's activity both operationally and technically. The Block comprises three discontinuous sections located in water depths ranging up to 110 meters and covers approximately 265 square kilometers. Previous exploration activity on the Block has resulted in some oil discoveries. The assignment of interests is subject to approval of the appropriate regulatory authorities of the Government of the Republic of Congo (Brazzaville).
Democratic Republic of Congo (Kinshasa) ("DRC")
SOCO DRC Limited, the Company's 85% owned subsidiary, holds 99% of SOCO Exploration and Production DRC Sprl (“SOCO E&P DRC”) which holds the Group's interests in DRC.
SOCO E&P DRC is the designated operator and 85% working interest owner of the 800 square kilometer Nganzi Block, onshore DRC. Acquisition of a 360 kilometre 2D seismic program was completed on the Block during the period, and processing has commenced.
SOCO E&P DRC holds a 32.5% participating interest in Block 5, located in the southern Albertine Graben in eastern DRC. An aeromagnetic and aerogravity survey was conducted in July and review of the survey results continues.
With revenues now being earned from oil and gas sales from two of its assets, the Company's balance sheet continues to strengthen, adding to the contribution provided by the sale of the Group's Yemen asset in the first half of the year. The significant current volatility in financial, commodity and currency markets increases the importance of the Company's strong cash position to fund exploration and development programs, particularly to further develop its assets in Vietnam.
SOCO's Annual Report and Accounts for the year to December 31, 2008 will be published in April 2009.