Horizon Oil advises the commencement of a planned four well exploration drilling program in Block 22/12, Beibu Gulf, offshore China.
At 0500 hrs (local time) on 1 January 2008, the Premium Murmanskaya jack-up rig commenced drilling the Wei 6-12W-1 well on the Wei 6-12 West Prospect, a stratigraphic-structural trap approximately 2.5 km to the northwest of the Wei 6-12S-1 oil discovery which the joint venture made in 2006. Strong amplitude anomalies have been mapped in a Weizhou unit over the prospect area analogous to those seen in adjacent stratigraphic intervals at Wei 6-12S and Wei 6-12-1 that have proven to be associated with oil-bearing sands. The proposed Wei 6-12W-1 well location will penetrate the region of best anomalous seismic amplitude.
The well, which is in 30 m of water, is expected to reach total depth of approximately 2,425 m later this month. The commencement of the drilling program was delayed by approximately two weeks because of rig equipment malfunctions which have now been rectified.
As of 0600 hrs (local time) on 2 January 2008 the current operation was drilling ahead in 17½ inch hole at 560 m.
Exploration program objectives
1. The program targets mapped prospects with aggregate potential in excess of 200 mmb oilin-place. All prospects have been defined on 3D seismic.
Two of the proposed wells will target attractive independent exploration prospects in the vicinity of the Wei 6-12 South field (see map). The third well will appraise the Wei 12-2-1 discovery in the southwest of the block which tested over 2,000 bopd oil from three separate sands in the Eocene Liushagang Formation. The location of the fourth well will be dependent on results of the first three and may have an appraisal / step out objective.
2. The program will test the most prospective remaining structural and stratigraphic anomalies in Block 22/12 in order to establish and retain extended appraisal / development areas over discoveries prior to scheduled relinquishment of the residual exploration permit area in late-2008.
3. Commercial discoveries which may result from the program are anticipated to represent high value satellite fields, complementing the 50 - 60 mmbo 2P reserves (200 mmb oil-in-place) already identified in four fields within Block 22/12, including the Wei 6-12 South and Wei 6-12 discoveries, which are now the subject of reserves certification and development approval processes. The Block 22/12 development concept is to establish a facilities hub with off-take in the Wei 6-12 area and thereafter tie-in the satellite fields to the south and, subject to the outcome of the current exploration program, new discoveries which should be developed at relatively low incremental costs.