re: petsec -- scarabeo7
ff1, lots more detail on where the money has been spent in the 20-F form just published by Petsec:
"The Company acquired a 75% working interest in West Cameron 343, offshore Louisiana at the March 2002 lease sale held in New Orleans, Louisiana by the MMS. In addition, the Company earned a 75% working interest in the adjacent West Cameron 352 lease by drilling a well in October 2002. A total of three wells were drilled on these two leases during the fourth quarter of 2002, each well encountering hydrocarbon-bearing sands with economic potential. The existing production platform on West Cameron 352 was upgraded and production from all three wells commenced towards the end of January 2003. The total cost of the acquisition, drilling of the first three wells and platform upgrade related to West Cameron 343 and West Cameron 352 (“West Cameron 343/352”) wells was $7.6 million and $1.5 million in 2002 and 2003, respectively.
In August and September 2003, the Company drilled two additional wells from the West Cameron 352 platform. Both wells encountered hydrocarbon-bearing sands with economic potential and were brought into production in October 2003. The total cost to drill the two wells was $5.0 million.
In December 2003, the Company drilled a well at Vermilion 258 that encountered hydrocarbon-bearing sands with economic potential. In January 2004, the well was cased and suspended awaiting further development. The Company expended $4.4 million in 2003 on the well. In January 2004, following the casing and suspension of the first well, the Company drilled a second well at Vermilion 258. That well also encountered hydrocarbon-bearing sands with economic potential and was cased and suspended awaiting further development. The Company is constructing production facilities for Vermilion 258 and plans to install a platform and pipeline. Following the installation, scheduled for the second quarter of 2004, the Company will complete the two wells and expects that production will start in the third quarter of 2004. The total estimated cost of drilling the two wells, constructing and installing the facilities, and completing the wells for production is expected to be $15.6 million.
As of December 31, 2003, the Company has overriding royalty interests or working interests in 11 exploration leases located in the Gulf of Mexico, offshore Louisiana and Texas of which six are currently undrilled. At the March 2004 lease sale held in New Orleans, Louisiana by the MMS, the Company was the high bidder for three additional exploration leases in the Gulf of Mexico. Total bids on the leases, which are at Main Pass 19, Vermilion 244, and Vermilion 259, were $1.3 million, net to Petsec. On April 27, 2004 the Company was awarded the Vermilion 244 and 259 leases in which it will hold 100% working interests. If awarded, the Company will hold a 55% working interest in the Main Pass 19 lease. The Company has begun preliminary planning for the possible drilling of up to five wells in 2004 in the Gulf of Mexico.
China. In 2002, the Company earned a 25% working interest in a block in the Beibu Gulf, offshore China by contributing to the drilling of a well. The Wei 6-12-1 well was drilled and intersected nine meters of net pay. The well was plugged and abandoned for further evaluation. The joint venture then completed a 3D seismic survey which was used to evaluate the economic potential of the existing discoveries and plan for future work. The Company expended $1.0 million in 2002 on the Wei 6-12-1 well.
In 2003, the joint venture focussed on interpretation of the 3D seismic survey identifying a number of drill targets. A three well drilling programme commenced in April 2004 to test one prospect and appraise two of the existing discoveries. The budgeted cost of the 2004 programme is $4.1 million, net to Petsec.
The 12-8-3 appraisal well intersected eleven meters of net oil pay in a highly permeable sand and confirmed the previous estimates of oil in place. The oil is a low API crude which will affect recoverability. The Joint Venture will assess the economic significance of the well over the following two to three months to make a decision regarding development. Both the 12-7-1 exploration well and the 12-3-4 appraisal wells were plugged and abandoned as dry holes.
PSA Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
