Time to lose the PPP thread. Lets refocus on one of the hottest...

Time to lose the PPP thread. Lets refocus on one of the hottest drilling prospects of the year.

Block 120 is located at the southern end of the Song Hong Basin, offshore Vietnam, covering an area of 8,469 Sq Km in water depths of 50 to 1,100 metres. The block has seen very little exploration activity, with only one well drilled to date, by BHP in 1993. The 120-CS-1X well was drilled on the Triton Horst, immediately east of the Quang Ngai Graben.

BHP discovered a 6 metre oil column and 32 metres of oil shows within a carbonate reservoir, with drilling halted for operational reasons before the planned Total Depth was reached. This result proves the presence of a working petroleum system within the block.

Neon acquired a 100% interest as Operator of the Block 120 Production Sharing Contract in early 2009, and subsequently farmed down to KrisEnergy Ltd in order to fund the 2D seismic work commitment. Neon and KrisEnergy then farmed down to Eni S.p.A. in 2012, in order to fund a discretionary 3D seismic programme and the drilling of the commitment exploration well.
Composite 2D/3D Seismic Section Showing Primary Prospects
The 500km2 3D programme was completed in mid 2012 and was designed to high-grade several prospects to facilitate prospect selection for drilling. The resulting high quality 3D seismic dataset has brought a significantly improved understanding of the potential reservoir distribution and probable hydrocarbon migration pathways, and also helped to identify an additional prospect. The 3D data also reveals a deeper Oligocene section than previously thought (based on the 2D seismic), thereby opening up the possibility of a gas system being present, in addition to the proven oil system.

The prospects currently under consideration for drilling are Rua Bien, Ca Ngu and Ca Lang. While prospective resource estimates for the newly identified Ca Ngu prospect are not yet available, Netherland Sewell & Associates Inc. (NSAI) completed a Prospective Resource Assessment of Ca Lang and Rua Bien in 2011, confirming gross unrisked prospective recoverable resources respectively for an oil case of 461 MMbbls and 611 MMbbls (best estimate), and 1,311 MMbbls and 1,724 MMbbls (high estimate). NSAI’s assessment was based upon the 2D seismic data that was available at the time, and subsequently the 3D seismic data has opened up the possibility of discovering gas, in addition to oil.

The Block 120 joint venture will select the prospect for drilling in July 2013, with the Songa Mercur semisubmersible drilling rig contracted to commence drilling by mid September 2013.