12th Apr 2005 07:01
Roc Oil Company Limited12 April 2005 12 April 2005 ROC OIL COMPANY LIMITED ("ROC") STOCK EXCHANGE RELEASE ROC ACQUIRES OPTION OVER THE BEETALOO BASIN, NORTHERN TERRITORY, AUSTRALIA KEY POINT • ROC has purchased an option over up to 87.5% interest in four exploration permits in the onshore Beetaloo Basin in Australia's Northern Territory. 1. THE TRANSACTION As a result of an Option Agreement ("the Option") entered into between ROC andSweetpea Petroleum Corporation Pty Ltd, a private Australian company affiliatedwith two privately-owned US companies, ROC is entitled to acquire up to 87.5% ofeach of four exploration permits - EPs 76; 98; 99 and (A)117 - which cover about7 million acres/28,000sqkm, representing most of the Beetaloo Basin in theNorthern Territory, approximately 500km southeast of Darwin (Attachment 1). The Option Agreement runs to mid-June 2005 during which time ROC will review thepetroleum prospectivity of the area and decide whether it wishes to exercise itsentitlement. If ROC exercises the Option, the final equity which the Company will acquire ineach of the four permits will be determined by the magnitude of a seismic anddrilling programme that would be operated and 100% funded by ROC during the nexttwo or three years. As a result of fulfilling a minimum work programme,consisting of 330km of 2D seismic and an exploration well, ROC will earn a 50%interest in three of the permits and a 75% interest in the fourth permit inwhich the well is drilled. The preliminary cost estimate for such a programme isA$3 to 4 million. The Option provides ROC with the right to earn furtherinterests in all four permits by operating and funding up to seven additionalwells. In consideration for the Option, ROC has paid approximately US$50,000 toSweetpea as a partial reimbursement of the company's past costs. If the Optionis exercised and the farmin fully completed Sweetpea will retain a 12.5% workinginterest in each of the four permits plus a 5% overriding royalty. The Option is subject to normal industry terms and conditions. 2. THE BEETALOO BASIN The Beetaloo Basin covers approximately 8.8 million acres/35,600sqkm and isbarely explored. The basin contains more than 3,000m of Precambrian and younger sedimentsincluding several thick, rich source rock intervals, the richest of which hasreportedly more than 100m of black, generally oil-prone, shale with a totalorganic carbon content (TOC) which typically ranges from 4 to 7% but which canbe as high as 12%. Three thick sandstone sequences also occur within the basinwhich may represent potential reserves interbedded with the source rockintervals. Large, untested structural leads are also thought to be present. Within the basin there is only about 2,700km of 2D seismic and 11 wells. Most ofthe wells are stratigraphic tests, drilled during the late-'80s to early-'90s bythe petroleum arm of a large mining company. Few, if any, of the wells werelocated with reference to seismically defined structural closures. Nevertheless,oil shows have been reported in several of these holes and free oil has beenreportedly recovered on test. International oil producing areas which are considered to be broad analogues tothe Beetaloo Basin exist in North America, eastern Siberia and the Middle East. 3. CEO'S COMMENTS Commenting on the transaction, ROC's Chief Executive Officer, Dr John Doranstated that: "In a number of ways this transaction is a typical ROC deal. It is a series oflow cost options, with a private company, run by knowledgeable industry peoplewith whom we feel comfortable. It relates to an area which most industryparticipants would consider unfashionable and an opportunity which has beensourced through our industry contacts. The upside potential is large but, asyet, unproven, because, despite appearing to have the ingredients for thegeneration and entrapment of oil, the area is, for all practical purposes,barely explored. Quite a few things have changed during the 12 or more years that have passedsince the last time there was a serious attempt to look for oil in the BeetalooBasin. Substantial infrastructure has been established in the form of a muchimproved road link and a new rail line to Darwin; new gas pipelines have beenconstructed; Aboriginal land right agreements have been executed - and oil is nolonger US$12/BBL. In some parts of the world the seven million acres involved in the transactionwould, perhaps, impress; but, in Australia we have a healthy cynicism about suchthings and fully realise that a big, pure exploration acreage position is, notin itself, of any immediate value - although it does come in handy when adiscovery is made." Bruce Clement For further information please contact:Chief Operating Officer Dr John Doran on Tel: +61-2-8356-2000 Fax: +61-2-9380-2635 Email: jdoran@rocoil.com.au Or visit ROC's website: www.rocoil.com.au Dr Kevin Hird General Manager Business Development Tel: +44 (0)207 586 7935 Fax: +44 (0)207 722 3919 Email: khird@rocoil.com.au Nick Lambert Bell Pottinger Corporate & Financial Tel: +44 (0)207 861 3232 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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