June 24 (Bloomberg) -- A Premier Oil Plc-led group found oil and gas off the coast of southern Vietnam in its first well in the area, as the U.K. company seeks to build on earlier drilling success in the Southeast Asian nation.
Testing at two reservoir zones in Block 07/03 produced flows at a combined rate of 3,265 barrels of oil and 8.1 million cubic feet of gas a day, Premier said today in a statement. The London-based explorer has previously said the Chim Sao and Dua fields, located in an adjacent block, are commercially viable.
The Premier-led group, which also includes Vietnam American Exploration Co., Australia’s Pan Pacific Petroleum NL and a unit of Abu Dhabi-based Mubadala Development Co., began drilling the Ca Rong Do exploration well in Block 07/03 last month. The area was opened up for drilling by a 2003 accord between the Indonesian and Vietnamese governments.
“The flow rates are similar to what Chim Sao flowed in testing,” Phil MacLaurin, Vietnam country manager for Premier, said today by telephone from Ho Chi Minh City. “That is good news because it shows that reservoir-quality sandstones are present.”
Premier advanced 3.6 percent to 1,097 pence in London trading, the biggest one-day gain in three weeks.
The prospect targeted by the Ca Rong Do well may hold 80 million barrels, Pan Pacific Petroleum said in a May presentation.
‘Good Result’
“It’s a good result,” Nathan Piper, an Edinburgh-based analyst at RBC Capital Markets, said today in a telephone interview. “It’s a decent test rate and proves there’s oil in the area, and they’ve got other prospects to drill. That’s a good position to be in.”
No water was found in either zone as the explorers drilled to a depth of 3,810 meters (12,500 feet), according to Premier, which said the partners now plan a three-dimensional survey to define the resource potential of the find and adjacent prospects.
“We wouldn’t invest in a 3D seismic survey if we didn’t think an area had future potential,” MacLaurin said. “That is additional work that we’re planning as a consequence of this success.”
The area of the Nam Con Son Basin, where drilling took place, is “under-explored” and has “numerous leads and prospects,” Premier Chief Executive Officer Simon Lockett said in the statement, adding that the company is planning an “active” seismic and drilling program.
A second exploration well is planned for the fourth quarter, Premier said.
Pan Pacific, which described the results as “very encouraging,” jumped 8.4 percent today to 45 Australian cents in Sydney trading.
To contact the reporter on this story: Jason Folkmanis in Ho Chi Minh City at [email protected]
PPP Price at posting:
45.0¢ Sentiment: Buy Disclosure: Held
