Interim Management Statement

RNS Number : 3079W

Soco International PLC

17 November 2010

 



SOCO International plc

("SOCO" or the "Company")

INTERIM MANAGEMENT STATEMENT

SOCO presents its Interim Management Statement for the period from 1 July 2010 to 16 November 2010.

In the period since the Half Year Results, SOCO has drilled three development wells and an appraisal/exploration well on Block 16-1 in the Cuu Long Basin, offshore Vietnam, and two wildcat exploration wells in a previously undrilled Basin onshore the Democratic Republic of Congo.

The first two development wells on the Te Giac Trang ("TGT") Field were completed in October. Preliminary log analysis of the first well, the TGT-H1-1P, drilled to essentially twin one of the original discovery wells, indicated that the well encountered the top of the target reservoir horizon on prognosis. The second well, the TGT-H1-2P, encountered the reservoir section approximately 10 metres higher in the section than the pre-drill prognosis, which strongly supports the favourable structural reservoir analysis following the reprocessed pre stack depth migrated seismic that the TGT Field extends to the east.  The TGT-H1-3P well is currently being completed. 

All the development wells will be suspended and will become producing wells upon start-up of production, which is scheduled to commence in August of 2011. Production during this first phase of development is estimated to be circa 55,000 barrels of oil per day ("BOPD").

The appraisal/exploration well drilled on the Te Giac Den ("TGD") Appraisal Area, the TGD-2X, reached a total depth of 4,669 metres at the end of August 2010 after penetrating the target hydrocarbon zone in the Oligocene "E" formation.  The well encountered significant hydrocarbons in a clastics reservoir sequence at approximately 4,550 metres measured depth and produced both black oil and gas on test.  However, the well flowed at sub-commercial rates and, consequently, the well was plugged and abandoned

The two wildcat exploration wells drilled on the Nganzi Block, onshore the Democratic Republic of Congo, whilst not commercial discoveries, confirmed the presence of oil and provide valuable data that will be used in further evaluation of the area.

During the third quarter of 2010, gross production from the Ca Ngu Vang Field on Block 9-2 in the Cuu Long Basin was approximately 9,600 barrels of oil equivalent per day ("BOEPD") (2,400 BOEPD net to SOCO's working interest), comprising approximately 6,970 BOPD and 16 million standard cubic feet of gas and gas liquids per day.  The field had a planned shut-in from 26 October to 7 November to conduct a field wide down hole pressure survey, the results of which will be used in support of reservoir management strategies and field reserve estimates. 

The Group's balance sheet was further strengthened with the 20 September 2010 completion of the disposal of its wholly owned subsidiary, SOCO Thailand LLC, to Salamander Energy plc, after gaining shareholder approval at an Extraordinary General Meeting. The subsidiary's primary asset was the Bualuang producing field offshore Thailand.  Consideration included an initial payment of US$105 million (subject to certain financial adjustments), plus contingent cash consideration of US$1 million.

OUTLOOK

The TGT development drilling programme will continue uninterrupted in the succeeding months until the drilling rig is moved from the platform jacket in order to install the platform topsides and production facilities.  Some of these wells will be drilled to further probe the edges of the field as interpreted by the current field geologic model.  Thus these wells could have reserve implications.

The Company is in the process of applying for an extension to the TGD appraisal area licence, which is otherwise set to expire at the end of 2010.  The extension period would allow for an appropriate evaluation of all the drilling results on TGD to date and an opportunity to acquire further seismic, if needed, over the appraisal area.

The drilling programme to date in the Democratic Republic of Congo has been very encouraging although not resultant in a commercially successful well.  A third exploration well is expected to spud soon, following which all of the data from this initial drilling programme  will be incorporated into the area evaluation to determine the extent of an anticipated follow-up drilling programme to be conducted during the third quarter drilling weather window of 2011.

Preparations will continue for drilling offshore in Congo (Brazzaville) with long lead items being ordered throughout the rest of the year.  The award for a drilling tender is expected before year end.

The security review over Block 5 in the Albertine Rift in the Democratic Republic of Congo is ongoing.  Negotiations for the acquisition of 2D seismic are expected to conclude in the near future, with the programme commencing shortly thereafter.

The TGT oil development in Vietnam is set to transform the cash resources of the company when it comes on stream in mid 2011.  Meanwhile the Company continues to seek positions offering material exploration potential in those parts of Africa where it has a clear business edge.

ENQUIRIES

SOCO International plc

Roger Cagle, Deputy Chief Executive and Chief Financial Officer

Tel: [phone]

Pelham Bell Pottinger

James Henderson

Archie Berens

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's Block 16-1 and Block 9-2 projects in Vietnam are located offshore in the oil rich Cuu Long Basin, which is a shallow water, near shore area.  SOCO holds its interests in Vietnam through its 80% owned subsidiary SOCO Vietnam Ltd. ("SOCO Vietnam") and through its 100% ownership of OPECO Inc. SOCO Vietnam 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 Inc. 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% interest in the Marine XI Block and a 19.4% 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), all onshore, though its 85% owned subsidiary, SOCO Exploration and Production DRC Sprl ("SOCO E&P DRC").  SOCO E&P DRC holds a 65% working interest in the Nganzi Block, situated 50 kilometres from the west coast, and a 38.25% participating interest in Block 5, situated in the southern Albertine Graben in 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 Production Sharing Agreement for the Cabinda Onshore North Block.

 

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