KEY EVENTS FOR THE QUARTER• Jamaica project farm-out process...

KEY EVENTS FOR THE QUARTER
• Jamaica project farm-out process commenced
• Kenya exploration completed
• Award of Madagascar exploration acreage
Jamaica exploration progress (Blocks 6, 7, 10, 11 and 12)
Key progress in Jamaica during this quarter includes:
• Large potential prospects and leads identified
• Commencement of formal farm-out process
Gippsland Offshore have now completed the initial interpretation of the Walton Basin data on behalf of
the Jamaica Joint Venture (JJV). The JJV has begun the process of seeking a partner to move into more
detailed exploration to prioritise the leads and prospects mapped prior to drilling. The JJV is aiming to
complete this farm-out process in October of this year.
Key elements of the data interpretation are:
• Fifteen leads have been identified on the new seismic and FALCON® data (six of these have been
upgraded to prospects)
• Source rocks have been identified within the Cretaceous and Tertiary
• Reservoir rocks have been intersected in wells and outcrop on the island of Jamaica
• All of the elements of a working petroleum system are present
Four different play types have been identified:
• Mid Miocene (Top White Limestone) structural traps
• Eocene and Miocene reefal build-ups
• Eocene basin floor fans
• Base Tertiary structural traps
To date, the volumetric evaluation of the key six prospects indicates a sizeable trapping potential within
the permits.
A number of these leads and prospects have multiple targets. The following diagram shows the
distribution of the leads and prospects in the basin.
The Little Creatures Prospect and the Squire Prospect overlap as shown on the following seismic section.
At this early stage the Little Creatures prospect covers an area of 160km2 and Squire at 65km2.
The largest prospect, Boag, a mid Miocene structural trap has the unrisked potential to hold 1,500mmbbls
oil recoverable.
The JJV has been able to establish a strong foothold in the available acreage located offshore in the
Walton Basin in to the south-west of Jamaica. The acreage comprises an area of over 14,500km2 in an
exciting frontier province. This has enabled Gippsland Offshore and their partner to review the basin as a
whole and develop numerous different play types and concepts.
At this early stage, the large potential size of traps is exciting to the JJV who have completed all of the data
acquisition required under the PSC with the Petroleum Corporation of Jamaica in the first year of the 5
year agreement (Petroleum Sharing Agreement).
There is large follow up potential for each play and the plays are sufficiently independent to allow for a
multiple well drilling programme. For comparison of size to the North West Shelf of Australia,
Block 6, Lamu Basin, Kenya
Gippsland Offshore and their partner in the L-6 Lamu Basin JV, Kenya completed the data acquisition of
6,273 line kilometres of FALCON® airborne gravity gradiometry and magnetic data during the quarter
following the completion of the seismic survey in February of this year.
The data will be integrated into this recently acquired seismic data and drillable prospects mapped by the
end of September. The JV has the right to move into the next phase of the PSC requiring the drilling of 2
wells in 4 years if suitable drill targets are identified.
L-6 is a coastal block with approximately 30% of the area being onshore. The airborne survey and
specifically the FALCON® technology contained therein is considered key in linking the known onshore
geology to the offshore geology and helping to unlock the basin’s structural settings.
To date, leads and prospects with the potential to hold 1.1 billion barrels of oil or 5TCF of gas have been
mapped in the permit. The new data will be used to better understand and rank these leads and
prospects prior to moving into the drilling phase of the PSC.
The completion of the seismic and FALCON® programs fulfils Gippsland Offshore’s farm-in commitment to
L-6 and hence, we have now earned their 60% equity and operatorship of the block.
Kenya, with its high petroleum prospectivity, attractive Government commercial terms, proximity to the
growing East African and Indian energy markets, is a high quality component of Gippsland Offshore’s
ongoing exploration portfolio.
The L-6 area encompasses 4,918km2. An image showing the block boundary and the FALCON® survey
outline follows.
Cape D’Ambre and Isle St Marie Basin, Madagascar
Gippsland Offshore has applied for two high
potential offshore exploration permits from the
Government of Madagascar.
The permits are expected to be awarded soon
to Gippsland Offshore and its joint venture
partner, East Africa Exploration Limited of Dubai
(EAX).
Bids for the acreage were submitted in
December 2006 in the Government’s licensing
round and representatives from both
companies were invited to present their bid and
negotiate the contract terms in February of this
year.
The Office for National Mining and Strategic
Industries (OMNIS) expect to offer the
Production Sharing Contract’s to successful
companies in the coming weeks.
Gippsland Offshore and EAX submitted bids for
the Isle St Marie basin on the east of the Island
and the Cape D’Ambre area to the north of the
island.
Offshore Madagascar is part of the under-explored East African margin which is generating considerable
interest in the oil exploration sector following recent discoveries in the region. Since 2004, Madagascar
petroleum exploration levels have increased with OMNIS having signed PSC’s with ExxonMobil, Vanco
Energy, Sterling Energy, Vuna Energy, Aminex and Tullow.
The patented FALCON® airborne gravity surveying technology will play an important role in winning the
exploration acreage as it will be crucial to geologically mapping these large, frontier areas. The Isle St
Marie encloses 20,000km2 and the Cape D’Ambre bid area encloses 16,000km2. The large areas will be
explored over an 8 year period with drill or drop well obligations in the final phase of exploration. In line
with GOP’s strategy to fast track the exploration and targeting process, the JV will be commencing both
the airborne geophysical and seismic data acquisition as soon as practical after the signing of the PSC.
To date, there is an estimated 20 billion barrels of oil in the yet undeveloped tar sands and heavy oil
accumulations on the island’s west coast. With only 10 exploration wells having been drilled in the
offshore basins, the area is truly underexplored.
Early mapping of the two areas indicates excellent opportunity for oil and gas accumulations in the two
areas.