Ann: Kangaroo-2 Progress Report No 6, page-49

Overall I think the announcement is OK, it could have been worse.

Even at ~6000-8000 boped it looks like it is going to need horizontals IMO. Shouldn’t be too hard given the shallow water and reservoir depths... although I am no expert.

Otto Energy’s 33% Galoc Field in Philippines did two horizontal wells and subsea insatalation to upgrade and existing FSPO operation for a total of ~$180 mil in 2013. Each horizontal well only flowed (as anticipated) at an initial ~6000 bopd. These two wells only gave a 2P reserve increase of 11 MMstb and extended the field life for ~5 years at ~10000-12000 bopd. The program was deem a success (oil was above $100/b) and OEL are about to or have just sold their 33% for ~$100 mil.

Based on the Galoc field its hard to believe that two or three horizontals at Kanga flowing ~10000 bopd each with 2P reserves of say 70 MMb is not commercial. It might need oil to be above $80... but that could be a matter of time...