6th May 2008 07:03
Rift Oil PLC06 May 2008 For immediate release 6 May 2008 Rift Oil plc Drilling to Start on 10 May 2008 at Puk Puk-1 Rift Oil Plc ("Rift"), the oil and gas exploration company with assets in PapuaNew Guinea ("PNG"), is pleased to advise that drilling of Puk Puk-1 willcommence on 10th May 2008. This is a major milestone in the development andexploitation of the Douglas gas discovery area in PPL 235, PNG, via its whollyowned subsidiary, Foreland Oil Limited. Flow testing will follow leading to anassessment of the size of the field. Depending on drilling and testingprogress, the results of Puk Puk should be known in June and of the Douglas-1flow test in July... Puk Puk-1 is Rift's second well in this drilling phase. The Company'sindependent expert has advised that this exploration target has a meanrecoverable resource of 226 BCF gas in the event of success, and that theDouglas discovery, Langia and the un-risked prospects in PPL 235 are estimatedto have a most likely potential recoverable resource in the order of 800 BCFwith the possibility of up to 1.3 trillion cubic feet recoverable, in the eventof success. Background The Department of Petroleum and Energy ("DPE") of PNG has approved Puk Puk-1 asan obligatory exploration well, which is a separate structure located 25kilometres from Douglas-1. The Douglas discovery was made in May 2006. In March 2007, Rift and its jointventure partner, Austral Pacific Energy Limited ("Austral"), signed anon-binding memorandum of understanding ("MOU") with Alcan to furtherinvestigate the supply of approximately 40 BCF per annum of gas to the GoveAlumina plant in Northern Territory, Australia for a period of 20 yearsfollowing initial production. Supply is proposed to be via a direct pipelinefrom the Douglas discovery to Gove, subject to the joint venture establishingsufficient reserves. Under the terms of the tri-partite MOU, the joint venturestated its intention to carry out an active drilling programme during the firstsix months of 2008. More recently we have been approached by several parties offering alternativemethods of gas delivery to the wider world market. Discussions are continuingwith all parties but our first objective is to drill and test (if warranted) PukPuk-1, and flow test Douglas-1, to quantify economic reserves. Rift has been pursuing Austral for its share of the costs of the agreed minimumwork programme and remains in discussions to amicably resolve the currentdispute however, regrettably Austral is in default of the outstanding AFE's,currently totalling some US$2.9 million, and Rift is pursuing its legal rightsto recover this through the New Zealand High Court. Rift has sufficient funds to cover 100% of the costs of drilling and flowtesting of Puk Puk 1 and the flow testing of Douglas 1 and will thereforecontinue the programme. Ian Gowrie-Smith, Chairman of Rift, commented : "The start of drilling is a major step forward as it will rapidly lead to a moreaccurate estimation of the size of the field and its valuation. We have highhopes that Puk Puk will prove to be a significant discovery, and that the flowtests from it and Douglas-1 will confirm reserves to the standard required for asupply agreement which will transform Rift." Further enquiries: RiftDavid Lees, Ian Gowrie-Smith 020 7340 9970 Buchanan CommunicationsTim Anderson, Isabel Podda 020 7466 5000 RBC Capital MarketsAndrew Smith, Sarah Wharry 020 7653 4000 The information presented in this announcement has been reviewed and verified byPeter Mikkelsen FGS, AAPG, non-executive Director. Mr Mikkelsen is theQualified Person for the purposes of the AIM Guidance Note on Mining, Oil andGas Companies dated March 2006. Mr Mikkelson is a geologist with 30 years ofupstream oil industry experience, including 15 years at exploration managerlevel or equivalent. He received a Bsc (Hons) degree in Geology from OxfordUniversity in 1976. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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