aed target 30kbpd at puffin

MELBOURNE (Dow Jones)--AED Oil Ltd. (AED.AU) said Wednesday that drilling at its Puffin project in the Timor Sea should see total oil production rise to just under 30,000 barrels a day by the first quarter of calendar 2009.

Lower-than-expected initial production at Puffin sparked a cash crisis for AED last year and saw the company's shares savaged, prompting it to launch a sale process that saw China Petrochemical Corp., also known as Sinopec Group, pay A$600 million for a 60% stake in its fields.

AED Chairman David Dix said two wells will be drilled at Puffin in the second half of calendar 2008 at a cost to AED of between US$40 million and US$50 million, with one
appraisal well at Puffin South West and one production well at Puffin North East.

Dix told reporters in Melbourne that the new Puffin NE well should be producing about 25,000 barrels of oil a day by the first quarter of 2009 which, together with existing
production of about 5,000 barrels a day, should take output to close to 30,000 barrels a day.

After paying off its debts, AED has about A$350 million net cash and Dix said it is looking at several assets in Southeast Asia and that the partnership with Sinopec could
be of benefit in chasing acquisitions.

"The introduction of Sinopec as a joint venture partner who has also indicated that they wish to do other things with us as we go forward, also provides us with significant credibility in the Asia Pacific region in looking at projects that would otherwise be beyond our scale and size," he said.

Dix said Sinopec, which has a stake in another field in the Timor Sea adjacent to AED's Puffin project, had indicated it was looking to boost its operations in
Australia.


25/06/08 13:11 (View) Back