Interim Management Statement

RNS Number : 2105R

Soco International PLC

01 November 2011

 



1 November 2011

SOCO International plc

("SOCO" or the "Company")

INTERIM MANAGEMENT STATEMENT

SOCO today announces its Interim Management Statement relating to the period from 1 July 2011 to 1 November 2011.

OVERVIEW

·     Production from the first phase of Te Giac Trang ("TGT") commenced on schedule on 22 August 2011, and is currently producing in line with expectations averaging approximately 35,000 barrels of oil per day ("BOPD") and 20 million cubic feet of gas per day ("MMCFD"); plans to achieve 55,000 BOPD production plateau to be in place by Q1 2012.

·     Batch drilling on the second phase of TGT development began in October 2011. Surface casing has been set on all five wells and drilling continues ahead on schedule.

·     Te Giac Den 3D seismic acquisition programme has been completed.

·     Three well exploration campaign underway offshore Congo (Brazzaville), with the first well on Block Marine XI at total measured depth of approximately 3,515 metres.

OPERATIONS

VIETNAM

Block 16-1

Te Giac Trang ("TGT")

The TGT Field in Vietnam, which commenced production on 22 August 2011, is currently producing approximately 35,000 BOPD with limited reservoir intervals having been perforated, while the wells are tested and baseline reservoir management information taken.

Joint technical meetings at the end of October have resulted in some modifications to the initial reservoir management plan following the review of the initial performance of the wells. Production from wells with perforated Miocene sands is performing as expected, as is production from two of the three wells with perforations in the Oligocene reservoir. However, to more thoroughly evaluate the reservoir sweep within the Oligocene reservoir, additional perforations within the shallow, more productive Miocene reservoir have not been added to date, which is a deviation from the original plan. A revised reservoir management plan, reviewing amendments to the current 2012 development drilling programme, which includes four wells from the H1 well head platform, and individual well management plans to achieve plateau production of 55,000 BOPD is to be reviewed and agreed by the first quarter of 2012.  Production will remain at current levels whilst the Hoang Long JOC undertakes extensive testing of well capabilities and the various systems of the Floating, Production, Storage and Offloading vessel.

Gas export, through a pipeline to the nearby Bach Ho Facilities for processing and transportation to shore via the existing pipeline infrastructure for further distribution, has also commenced at low rates while the gas related process systems are fully tested and commissioned.  Peak gas production will be approximately 30 MMCFD.

The TGT Phase II development drilling operations commenced offshore Vietnam in October with the spudding of the first well at the H4 wellhead platform by the PetroVietnam Drilling PVD-1 jack up drilling rig.  Batch drilling of the five wells is ongoing with all surface casing set. The wells are expected to be completed for production start up in August 2012.  

Te Giac Den ("TGD")

An extension period for the TGD Appraisal Area was approved by the Government of Vietnam in May 2011.  During the third quarter, approximately 140 km² of full fold 3D seismic data was acquired over the TGD Appraisal Area.  The data has been sent out for processing, the results of which are expected around year end.

The initial extension period is from 1 January 2011 to 30 April 2012.  An additional six months extension will be in effect (through 31 October 2012) in the event that the Company elects to drill a well.

Ca Ngu Vang ("CNV")

Work is underway to install additional dedicated test separation and metering facilities on the Bach Ho central processing platform complex in order to more accurately measure liquid and gas production from the CNV production stream entering the Bach Ho facilities.  The separator is currently being installed with the metering equipment expected to be installed in the first quarter of 2012.  The benefit to the Company will be a more accurate allocation of CNV oil, gas and gas liquids production within the Bach Ho production system, which is expected to add approximately 2,000 BOPD to the liquids stream.

During the period to 31 October, CNV production net to the Company's working interest has averaged approximately 2,400 barrels of oil equivalent per day.

AFRICA

REPUBLIC OF CONGO (BRAZZAVILLE)

The multi well exploration drilling campaign offshore Congo (Brazzaville) was launched with the spudding of the Mindou Marine 1 ("MIM-1") exploration well on 5 September 2011 in the Marine XI Block.

The well reached a total measured depth of approximately 3,515 metres on 31 October without encountering hydrocarbon bearing reservoir.  The target reservoirs were carbonates and sandstone of the pre-salt TOCA and Djeno formations. Palaeontology results from the well, however, suggest that older-than-anticipated sediments were below the salt.  Thus, the basal Vandji sand, producing elsewhere in the area but previously thought to be too deep to be considered, became a viable reservoir target. Although inconclusive at this early date, it appears that the basal Vandji sand has poor reservoir characteristic. The Company will now run electronic logs over the interval before making further operational decisions.

The second well in this current drilling programme, a commitment well, will target the Cretaceous interval above the salt layer on the Marine XIV Block.  With pre-drill unrisked mean recoverable resources of 40 million barrels, the well should take approximately 30 days to drill.

A location for the final, contingent well in the drilling programme will be either a Cretaceous target in the Marine XI Block with 70 million barrels of pre-drill mean unrisked recoverable resources or a follow-up appraising the Vandji potential in Marine XIV.

DEMOCRATIC REPUBLIC OF CONGO (KINSHASA) ("DRC")

Evaluation of the Nganzi Block, onshore the DRC, incorporating information gathered in the 2010 drilling programme has been completed and indicates remaining prospectivity in the Chela formation. A second 2D seismic acquisition programme is planned for the fourth quarter of 2011, with possible drilling in 2012 prior to the end of the initial exploration period.

The security review over Block V in the Albertine Rift in the DRC is ongoing.  The Company's initial environmental and social impact assessment ("ESIA") was submitted to the Groupe d'Etudes Environnementales du Congo in March 2011 and, following a period of review and consultation with stakeholders, including various departments within the Government of DRC, a final ESIA was submitted in May and was later approved.  An aeromagnetic and aerogravity survey will be conducted early in 2012 with a seismic programme over Lake Edward to follow.  The exploration licence was granted by a decree signed by the Hydrocarbons Minister on 26 October 2011.  

OUTLOOK

Testing of TGT well capabilities and facility capacity is ongoing with more definitive results expected by year end.  The Phase II development will continue though 2012 with additional production complementing Phase I volumes from mid-2012.

Separation facilities for the CNV production stream are expected to be completed by the end of first quarter of 2012

Further evaluation of the Nganzi Block, onshore the DRC, is being undertaken, with a 2D seismic acquisition programme focusing on specific Chela leads to be conducted during the fourth quarter.  Concurrently, remapping of the existing seismic is underway, focusing on the Chela formation. 

The Company continues to evaluate exploration opportunities in South East Asia and Africa.  Although it is not guaranteed that any new projects will be introduced in the near term, the TGT oil development in Vietnam significantly adds to an already strong balance sheet ensuring that the Company will be well financed to conduct an aggressive exploration programme. 

ENQUIRIES:

SOCO International plc

Ed Story, Chief Executive Office

Roger Cagle, Deputy Chief Executive and Chief Financial Officer

Tel: [phone]

Pelham Bell Pottinger

James Henderson

Victoria Geoghegan

Tel: [phone]

NOTES TO EDITORS:

SOCO is an international oil and gas exploration and production company, headquartered in London, traded on the London Stock Exchange and a constituent of the FTSE 250 Index. The Company has interests in Vietnam, the Republic of Congo (Brazzaville), the Democratic Republic of Congo (Kinshasa) and Angola, with production operations in Vietnam.

SOCO holds its interests in Vietnam, all in the Cuu Long Basin offshore, through its 80% owned subsidiary SOCO Vietnam Ltd. and through its 100% ownership of OPECO Vietnam Limited. SOCO Vietnam Ltd. holds a 25% working interest in Block 9-2, which is operated by the Hoan Vu Joint Operating Company and holds a 28.5% working interest in Block 16-1, which is operated by the Hoang Long Joint Operating Company. OPECO Vietnam Limited holds a 2% interest in Block 16-1.

SOCO holds its interests in the Republic of Congo (Brazzaville), all offshore in the shallow water Lower Congo Basin, through its 85% owned subsidiary, SOCO Exploration and Production Congo SA ("SOCO EPC"). SOCO EPC holds a 29% participating interest in the Marine XI Block and a 29.4% participating interest in the Marine XIV Block and is designated operator of the two Blocks.

SOCO holds its interests in the Democratic Republic of Congo (Kinshasa) though its 85% owned subsidiary, SOCO Exploration and Production DRC Sprl ("SOCO E&P DRC"). SOCO E&P DRC holds a 65% participating interest in the Nganzi Block, situated in the North Congo Basin onshore western DRC, and a 38.25% participating interest in Block V, in the southern Albertine Graben onshore eastern DRC. SOCO E&P DRC is designated operator of both Blocks.

SOCO holds its interests in the Angolan enclave of Cabinda through its 80% owned subsidiary, SOCO Cabinda Limited, which holds a 17% participating interest in the Cabinda Onshore North Block located onshore in the North Congo Basin.

 

END

 

 

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