Global Petroleum Regulatory News (GBP)

16 Mar 2006 09:32

Global Petroleum Ltd16 March 2006 Global Petroleum Limited ABN 68 064 120 896 Global Petroleum announces first oil exploration drilling in offshore Kenya Global Petroleum Limited announces the decision of the Woodside-Dana-GlobalPetroleum Joint Venture to drill the first oil exploration well in offshoreKenya. "Global is extremely pleased to have secured a firm drilling plan and proposeddate for the commencement of exploration drilling in this under-exploredprovince," Global Chairman Dr John Armstrong said today. The joint venture (Woodside Energy (Kenya) Pty Ltd earning 50% and operator,Dana Petroleum 30% and Global 20%) has scheduled up to two wells to be drilledin Blocks L-5 and L-7 in offshore Kenya in the last quarter of 2006. The actualonset of drilling operations will be dependant on the delivery date of the rigto Kenya, currently scheduled for October this year, and further studies ofmet-ocean conditions. The Joint Venture has the option to drill a second wellimmediately following the first well or subsequently when the results of thefirst well are assessed. The costs associated with Global's 20% equity in L-5 and L-7 are carried for allactivities including the drilling of the first well in each permit. Woodsideonly earns its equity when these two wells are drilled. Kenya is a key part of the Global portfolio which also includes oil and gasexploration interests in the Falkland Islands (through the Company's 14%shareholding in Falkland Oil and Gas Limited) and Ireland and Malta. Dr Armstrong said that the Kenya acreage has the potential to become asignificant oil region: • Woodside currently regards Kenya as having "multiple large structural prospects" (November 2005 Woodside presentation); • Woodside's mapping and seismic surveys have identified more than 30 prospects and leads, a number of which are each capable of holding several hundred million to a billion barrels of recoverable oil; • The first prospect to be drilled is likely to be Pomboo in L-5 and the second possibly Sokwe in L-7; • Both prospects have reservoir objectives in rocks of Cretaceous and Tertiary age which elsewhere in the world contain a large proportion of the world's known oil and gas reserves; Drilling will be undertaken using the deepwater drilling vessel "Chikyu" whichhas been contracted by Woodside Energy Ltd through the Norwegian internationaldrilling contractor, Smedvig on behalf of the Japanese Agency for Marine-EarthScience and Technology (JAMSTEC). The rig contract is subject to JAMSTEC boardapproval anticipated in late April 2006 and assignment to Woodside Energy(Kenya) Pty Ltd subject to the relevant Joint Venture and Kenyan Governmentapprovals. Dr Armstrong said that obtaining a rig had proved particularly difficult withvery high rig usage and long term rig contracts arising from the strong oilprice over the past two years. "Drilling in our Kenya acreage represents a majorstep forward for the company. We are pleased that the decision to drill has beentaken and the first well placed firmly on Woodside's drilling schedule. It isGlobal's view that in a success case our Kenya acreage has the potential todeliver very significant upside value for shareholders," he said. Dr John Armstrong Executive Chairman Telephone: (07) 3211 1122 Fax: (07) 3211 0133 Web: www.globalpetroleum.com.au This information is provided by RNS The company news service from the London Stock Exchange