25th Sep 2009 07:00
Media Release 25 September 2009 OILEX SECURES DRILLING RIG FOR TWO WELLS IN TIMOR SEA
* Contract signed with Songa Offshore Drilling Limited to secure a drilling
rig for two wells in contract area JPDA 06-103 in the Timor Sea
* Drilling to commence following release of the rig from Woodside's imminent
1 to 3 well program on North West Shelf, WA * Oilex has funding for these wells under a previously announced Farm-Out Agreement between Oilex and Japan Energy (OEX retains 10% interest)
* Initial two-well program to drill prospects with combined prospective oil
resources of 285 million barrels (100% basis) adjacent to the recent Kitan
oil discovery (ENI)
Oilex Ltd is pleased to advise that it has signed acontract with Songa Offshore Drilling Limited ("Songa") to secure the servicesof the semi-submersible drilling rig "Songa Mercur". The rig will drill twowells (with the option of one additional well) in the contract area JPDA 06-103in the Joint Petroleum Development Area ("JPDA") of the Timor Sea.
The drilling contract is the latest in a sequence of recent events that will culminate in the drilling of two attractive offshore oil prospects in JPDA 06-103 including:
* Oilex farming out part of its interest in this block to Japan Energy E&P
JPDA Pty Ltd, a subsidiary of Japan Energy Corporation - resulting in Oilex
being carried for its 10% share of all costs associated with the first two
commitment wells (up to an agreed cap) and repayment of some of Oilex past
expenditures; * The term of the Production Sharing Contract (PSC) being extended to 15 January 2011; and
* The selection of the Lore and Lolotoe prospects with combined prospective
oil resources of 285 million barrels of oil as the locations for the
first two wells.
Prospects
The portfolio of prospects in JPDA 06-103 comprises over 20 structural closures. Drilling locations have been selected for the first two wells on prospects with recoverable mean prospective resources (on 100% basis) of 195 million barrels of oil (Lore) and 90 million barrels of oil (Lolotoe).
ROSPECTIVE RESOURCES - OIL (probability in million stock tank barrels recoverable) P90 P50 P10 MEAN PROSPECT LORE 20 102 515 195 LOLOTOE 14 57 220 90
Figure 1. Range of prospective resources on 100% basis, Lore& Lolotoe prospects JPDA 06-103
The prospect portfolio was prioritised on the basis of potential resourcevolume and technical risk. While oil is the anticipated hydrocarbon phase basedon nearest offset discoveries, the possibility also exists for significant gascondensate finds in the block. Conoco-Phillips' Bayu Undan gas condensate fieldis located about 40km to the south of JPDA 06-103.JPDA 06-103 lies close to significant recent discoveries and prolific producingfields further to the west along geological trend. ENI's 2008 discovery atKitan, located in the adjacent PSC to the west of JPDA 06-103, is now underdevelopment and wells and fields to the south and west of JPDA 06-103 havedemonstrated exceptionally high productivity on testing oil. The Kitan-1discovery well is reported to have flowed oil at a rate of 6,300 bopd from adrill stem test in the Elang/Plover Formation. The discovery was followed by anappraisal well, Kitan-2, that confirmed its commercial viability.
The Maura 3D seismic survey (2,140 km2), in combination with existing 3D seismic data in the block, provides 3D seismic coverage over about 90% of the contract area. The seismic data quality is excellent and the definition of events at the level of the top primary objective the Elang and Plover Formation reservoirs - allows for interpretation with a higher level of confidence than previously achievable using older seismic data.
Prospects were mapped in detail based on the integrated set of new 3D, regional 2D and older, reprocessed 3D seismic data and regional well data.
Farm-Out
Under the terms of the Farm-Out Agreement, Oilex has agreed to assign 15% ofits 25% interest in the block to Japan Energy E&P JPDA Pty Ltd, a subsidiary ofJapan Energy Corporation. The consideration payable by Japan Energy is made upof two components: (1) a part refund of past costs incurred by Oilex inrelation to JPDA 06-103; and (2) future funding of Oilex's remaining 10% shareof the costs for the first two commitment wells up to an agreed cap.
Oilex will remain as Operator of the PSC.
Rig ContractA drilling contract has been concluded between Songa Offshore Drilling Ltd andOilex (JPDA 06-103) Ltd on behalf of its Joint Venture for utilization of thesemi-submersible drilling rig "Songa Mercur". The contract covers a drillingcampaign of two wells and the option of one additional well in the JPDA 06-103contract area. The drilling rig is scheduled to mobilise for the Oilex JointVenture, subject to meeting certain contractual requirements, immediately afterrelease from its current contract with Woodside Energy Ltd, anticipated to bein November 2009 on the basis of Woodside's likely schedule of two wells.
Figure 2. Location map JPDA 06-103, Timor Sea
Figure 3. Prospects and leads JPDA 06-103(Please refer to Oilex website for full report)
The participating interests in the JPDA 06-103 PSC are:Joint Venture Party Participating Interest Oilex (JPDA 06-103) Ltd (Operator) 10%
Global Energy Inc 25% GSPC (JPDA) Limited 25%
Bharat PetroResources JPDA Limited 25%
Japan Energy E&P JPDA Pty Ltd 15%
For further information, please contact: Ray Barnes - Technical Director, Oilex Ltd Tel. +61 8 9485 3200 (Western Australia)
Archie Berens - Director, Pelham Public Relations Tel. +44 20 7337 1509 (United Kingdom)
Nicholas Read - Read Corporate Tel. +61 8 9388 1474 (Western Australia)
The information in this report has been compiled by the Managing Director ofOilex Ltd, Bruce McCarthy B.Sc. (Hons) PhD (Geology) who has over 30 yearsexperience in petroleum geology. The estimates of hydrocarbon resources werereviewed by Ray Barnes B.Sc. (Hons), the Technical Director of Oilex Ltd whohas over 35 years experience in petroleum geology and is a member of the AAPG.Mr Barnes reviewed this announcement and consents to the inclusion of theestimated hydrocarbon resources in the form and context in which they appear.The resource estimates contained in this report are in accordance with thestandard definitions set out by the Society of Petroleum Engineers, PetroleumResources Management System, 2007. Further information is available atwww.spe.org.
Oilex's nominated advisor in relation to the AIM market is RFC Corporate Finance Ltd, contact: Stuart Laing, [email protected]
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