PPP
24/06/2014 11:51
MINE
REL: 1151 HRS Pan Pacific Petroleum NL
MINE: PPP: Oi-2 Exploration Drilling Update as at 24 June 2014
24th June 2014
Oi-2 Exploration Drilling Update
Pan Pacific Petroleum ("PPP") has been advised by AWE, the Operator of permit
PMP38158, that the Oi-2 exploration well, which is being drilled by the
semi-submersible drilling rig "Kan Tan IV", has completed the installation
and testing of well control equipment and drilling operations have
recommenced. As at 06:00 hours (6.00am) NZDT today, the Oi-2 exploration well
was at a measured depth of 550m and the rig was running in hole with a 12 and
1/4 inch drill bit to commence drilling to the planned section target depth
of 1,500m.
Oi-2 will be drilled vertically to a planned total depth of 3,881m BRT.
PPP has increased its participating interest in Oi-1 from 15% to 50% pursuant
to the Sole Risk provisions of the Tui Joint Venture Operating Agreement.
NZOG and AWE have the right to reinstate their former interests in any
discovery by way of reimbursement of pro-rata well costs and the payment of a
buy-back premium.
Oi-2 will evaluate the hydrocarbon potential of a 4-way dip closed structure
draped over basement similar to the Tui, Amokura and Pateke Fields, and will
target the F10 reservoir sandstones which produce oil in these fields. PPP
estimates that if filled to spill point Oi will contain gross unrisked mean
recoverable prospective resources of 15 million barrels of oil with a Best
Estimate (P50) of 13.5 million barrels (Best Estimate net 6.75 million
barrels to PPP at 50% equity). The Oi-2 exploration well has been estimated
by PPP to have a 20-25% chance of success which is classified by PPP as
medium risk.
If Oi-2 is successful the Joint Venture partners will consider whether to
drill a sidetrack at non-sole risk participation levels (i.e. PPP 15%) to
provide additional information to assist with determination of resources and
development planning.
In the event of a commercial discovery it is envisaged that the field will be
produced by connecting to, and using spare capacity at, the Tui FPSO at
relatively low estimated incremental operating costs.
The Joint Venture partners in PMP 38158 are:
Pan Pacific Petroleum NL (via subsidiaries) 15.0% (50.0% in Oi)
AWE Limited (via subsidiaries) (Operator) 57.5%
New Zealand Oil & Gas (via subsidiaries) 27.5%
The information contained in this announcement is current as at the date
indicated in this release. This report is based on information compiled by
Tom Prudence (Chief Executive Officer). The Prospective Resource estimate for
the Oi exploration prospect was estimated using a probabilistic methodology.
Mr Prudence has a BSc (Hons) in Geological Geophysics and an MSc in Petroleum
Geology. He is also a Fellow of the Geological Society of London and a member
of the Society of Petroleum Engineers (SPE). Mr Prudence has consented in
writing to the inclusion of this information in the format and context in
which it appears.
For further information please contact: Tom Prudence
Chief Executive Officer
Pan Pacific Petroleum NL
Telephone: + 61 2 9957 2177
www.panpacpetroleum.com.au
End CA:00251945 For:PPP Type:MINE Time:2014-06-24 11:51:44
