Update-2002 Activity Profile
Fusion Oil & Gas PLC
4 December 2001
Fusion Oil & Gas plc
('Fusion' or 'the Company')
Fusion Releases Update to 2002 Activity Profile - December 4th 2001
Fusion is pleased to announce an update to its intended operational program
for 2002 including details of the drilling programme in Mauritania. In
certain instances the plans are subject to normal operational considerations
and government approvals.
Mauritania PSC A (Fusion 3%) and PSC B (Fusion 6%)
In May 2001 the company announced that it first exploration well offshore
Mauritania, Chinguetti-1, was an oil and gas discovery.
Following several meetings between the Mauritanian Joint Venture partners for
PSC A and PSC B, agreement has now been reached on the likely scope and timing
of the exploration and appraisal programme for 2002. This programme must now
be presented to the Mauritanian authorities for approval. In summary, the
parties have agreed to the acquisition of extensive additional 3D seismic,
field appraisal and development studies on Chinguetti and the drilling of up
to three offshore wells, which includes appraisal drilling of the Chinguetti
oil discovery. The drilling programme is expected to commence in third
quarter 2002, the timing dependent on contract negotiations for a suitable
deep water drilling rig. Details of the work programme and agreements reached
are as follows:
* 2002 Seismic Programme
Seismic reprocessing and evaluation of the 3D seismic data in the Chinguetti
area is currently in progress. This work is expected to be completed by second
quarter 2002 at which time a final decision will be made on the location of
the wells.
A large 3D seismic programme is to be undertaken in PSC Areas A and B
commencing in the first quarter 2002. This new seismic data will further
delineate the petroleum prospectivity of the basin in areas adjacent to the
existing extensive area of 3D seismic data and identify additional prospects
for drilling in subsequent years. The amount of 3D seismic planned for the two
PSC areas is:
PSC Area A 900 square kilometres
PSC Area B 515 square kilometres
* 2002 Drilling Programme
The drilling of two appraisal wells on the Chinguetti oil discovery, one firm
and one contingent, is planned for 2002, as well as a contingent exploration
well. The proposed order for drilling the wells is Chinguetti-2, followed by
the contingent Area B exploration well and then Chinguetti-3.
Following recent agreement on the drilling programme, Woodside is now
conducting negotiations with several deep water drilling rig contractors for a
suitable rig to commence the drilling operations in third quarter 2002. It is
expected that the rig contract will be finalised by late December 2001 or
early January 2002, at which time further details will be announced.
Appraisal
Production flow testing is planned during the appraisal programme.
In addition, field development studies and planning will commence in early
2002 for potential Chinguetti oil field development.
Exploration
A new exploration well may be drilled in PSC Area B, within 25 kilometres of
the Chinguetti-1 discovery. Currently two prospects are being considered,
pending completion of seismic depth processing work. The well is therefore
being carried as a contingent well until the completion of this work in the
second quarter 2002, at which time it is expected that it will be moved to the
firm category. Prospects being considered are salt domes with similar aged
reservoir target sands to the Chinguetti-1 oil discovery. If the new
exploration well is a discovery, it could be linked to the Chinguetti
production platform, thus enhancing the project economics.
The Gambia - Deepwater PPL (Fusion 100%)
An area for 3D seismic acquisition has been identified and discussions are
underway with potential joint venture partners with a view to commencing
acquisition of the 3D data during 2002.
AGC (Senegal/Guinea Bissau) - Cheval Marin (Fusion 10%)
Preliminary interpretations of the 2D seismic data acquired earlier in 2001
have encouraged the Cheval Marin joint venture (operated by Agip) to approve
the acquisition of approximately 2,400 sq km of 3D seismic data. Subject to
operational constraints acquisition is expected to commence within a matter of
weeks.
AGC (Senegal/Guinea Bissau) - Croix du Sud (Fusion 88%)
Preliminary interpretations of the 2D seismic data acquired earlier in 2001
have revealed extensive deepwater structuring in a favourable position to be
charged by a deepwater petroleum system that is interpreted to be comparable
to that encountered in Mauritania. An area for 3D seismic acquisition has
been identified and discussions are underway with potential joint venture
partners with a view to commencing acquisition of the 3D data during 2002.
Cameroon - Ntem (Fusion 100%)
Interpretation of the 2001 2D seismic data has identified a suite of leads and
prospects in a variety of depositional environments which are interpreted to
be analogous to existing discoveries further south along the West African
margin in Equatorial Guinea. The location of a proposed 3D seismic survey is
being finalised and discussions are underway with potential joint venture
partners with a view to commencing acquisition of the 3D data during 2002.
Gabon - Iris Marin and Themis Marin (Fusion 38.7%)
A special shallow draft vessel has been contracted and is mobilising to Gabon
to commence acquisition of approximately 2600 line km of 2D seismic data for
Fusion and its partners. This program is due to commence in mid-December 2001
and should be completed within 2 months. Detailed processing and
interpretation of these data will, it is hoped, identify a 'drill ready'
prospect before the end of 2002.
New Ventures
The company is making progress with new ventures in West Africa and North
Africa and will make further announcements as appropriate.
Fusion's Managing Director, Dr Alan Stein commented:
'We are pleased to have made substantial progress across all of the company's
projects. The 2002 drilling programme in Mauritania has the potential to
realise significant value for the company. The commitment by the company and
its joint venture partners to expanded and accelerated 3D seismic exploration
programmes in Mauritania and AGC Cheval Marin is also particularly
significant. The increased level of interest shown by other companies in
Northwest Africa as a result of the Chinguetti discovery gives the company a
greater degree of flexibility in executing its exploration programme in the
region.'
4 December 2001
For further details please refer to the company's web page
www.fusionoil.com.au or contact:
Fusion Oil & Gas plc Tel (61) 89 226 3011
Level 2 Scott House Fax (61) 89 226 3022
46 Kings Park Rd e-mail fusion@fusionoil.com.au
West Perth 6005
Western Australia
Alan Stein Managing Director
Jonathan Taylor Exploration Director
Fusion Oil & Gas plc Tel 020-8891-3252
8 Old Lodge Place Fax 020-8891-1555
St. Margarets e -mail peter@fusionoil.demon.co.uk
Twickenham
Middlesex
TW1 1RQ
United Kingdom
Peter Dolan Chairman
College Hill Associates Tel. 020 7457 2020
78 Cannon Street Fax. 020 7248 3295
London EC4N 6HH e-mail Peter.Rigby@collegehill.com
Peter Rigby
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