OilVoice - Pitkin Petroleum Announces Operational and Financial Update

Pitkin Petroleum Announces Operational and Financial Update

Thursday, May 14, 2009

Pitkin Petroleum Plc, the Pacific Rim oil and gas exploration and production company, announces the following update on the company’s activities in Vietnam, the Philippines and Peru, as well as its financial results for 2008 and new additions to its Board of Directors.

Vietnam

Pitkin, via its wholly-owned subsidiary, Vietnam American Exploration Company, LLC (“VAMEX”), started drilling in Block 07/03 on 6 May with the rig Hakuryu V. The first well, 07-CRD-1X, is evaluating the Cá Rong Ðo Prospect (originally referred to as Red Emperor). Water depth at the well location is 319 metres.

Block 07/03 covers an area of 4,915 square kilometres and lies between the Nam Con Son Basin hydrocarbon fields to the north and the East Natuna Basin discoveries to the south. A second well on the block is expected to be drilled in the last quarter of 2009.

Pitkin has a participating interest of 40% in the block with the operator, Premier Oil (30%), PearlOil (15%) and Pan Pacific Petroleumi (15%) as its partners.

Philippines

Pitkin’s Cuyo Block has been formally signed as Philippines Service Contract No. 71. The block lies offshore Northeast Palawan in shallow water. It is undrilled but studies suggest that a potentially thick sedimentary sequence exists in the block and a number of large structural leads have been identified. Reprocessing of existing 2D seismic is planned for 2009. Pitkin has a participating interest of 85% in the block with South China Resources Inc (15%) as its partner.

SC 71 is Pitkin’s third venture in the Philippines, where the Company’s portfolio comprises a total area of about 20,000 square kilometres, both onshore and offshore.

Peru

The Peru Block Z-38 2D marine seismic acquisition survey was completed in March 2009, with 2,393 kilometres of data recorded. Block Z-38, which covers 4,875 square kilometres, lies 15 kilometres from giant oilfields to the south that have produced over 1 billion barrels of oil and 25 kilometres west of BPZ’s Corvina Field. A number of substantial prospects and leads have already been mapped from existing seismic, most of them exhibiting direct hydrocarbon indicators.

Following PeruPetro and Government approval, equity interests of the participants in Block Z-38 will be: Pitkin (via VAMEX) 40%; Karoon Gas Australia Ltd 60%.

Financial Results

Pitkin recorded a profit after taxation for the year ended 31 December 2008 of $1.09 million (2007: loss of $2.40 million). The Group financial statements have been prepared for the first time on an IFRS basis with the successful efforts method of accounting.

At year end, the Group had cash and equivalents of $5.44 million and no debt. The Group’s balance sheet was reinforced after year end, with a placing in March of new ordinary shares that raised $16 million cash.

Board

Pitkin also announces that, effective 1 May 2009, it has strengthened its Board with the appointment of two further Non-Executive Directors, Dr Walter Brown and Mr Stuart Jackson, who represent Pitkin’s two largest shareholders. Dr Brown is Chairman and CEO of Philex Mining Corporation, the largest mining group in the Philippines. Mr Jackson is President of Sterling Projects, a Dallas property developer.