Rift Helium Regulatory News (RIFT)

12 Feb 2008 07:00

Rift Oil PLC12 February 2008 For Immediate Release 12 February 2008 Rift Oil plc Progress on Puk Puk 1 Drilling Rift Oil Plc ("Rift"), the oil and gas exploration company with assets in PapuaNew Guinea ("PNG"), is pleased to advise further progress towards thedevelopment and exploitation of the Douglas gas discovery area in PPL 235, PNG,via its wholly owned subsidiary, Foreland Oil Limited. The site is now beingprepared for drilling at Puk Puk which is expected to spud in April and, ifwarranted, will be flow tested. Subsequent to that operation the flow testequipment will be moved to the original Douglas-1 gas discovery for testing. OurCoral Sea rig should be on the Puk Puk site shortly. Site preparation and third party service contracts are being finalised. Theschedule includes time for the Coral Sea-1 Rig to be refurbished and the rigshould be on the Puk Puk site shortly. Drilling at Douglas-2 is likely to followPuk Puk-1, and is expected to provide information on the connectivity and extentof reserves in the Douglas structure. Tubing, casing and well head equipmentordered for manufacture in May 2007 is now on site. The Coral Sea-1 Rig is owned by the joint venture, 65% Rift Oil and 35% Austral.It is a heli-portable oil rig with a self erecting crane on the rig floor, andis generally designed for remote location work. The Department of Petroleum and Energy ("DPE") of PNG has approved Puk Puk-1 asan obligatory exploration well, which is a separate structure located 25kilometres from Douglas. The DPE's approval included some seismic testing andforeshadowed an appraisal well, expected to be Douglas-2, aimed at establishingpart of the dimension and scale of the Douglas discovery, which also extends tothe North and East. Puk Puk-1 is the first well in this drilling phase. Our independent expert hasadvised that this exploration target has a mean recoverable resource of 226 BCFgas in the event of success, and that the Douglas discovery and the un-riskedprospects in PPL 235 are estimated to have a most likely potential recoverableresource in the order of 800 BCF with the possibility of up to 1.3 trillioncubic feet recoverable, in the event of success. The Douglas discovery was made in May 2006. In March 2007, Rift and its jointventure partner, Austral Pacific Energy Limited ("Austral"), signed anon-binding memorandum of understanding ("MOU") with Alcan to furtherinvestigate the supply of approximately 40 BCF per annum of gas to the GoveAlumina plant in Northern Territory, Australia for a period of 20 yearsfollowing initial production. Supply is proposed to be via a direct pipelinefrom the Douglas discovery to Gove, subject to the joint venture establishingsufficient reserves. Under the terms of the tri-partite MOU, the joint venturestated its intention to carry out an active drilling programme during the firstsix months of 2008. Further to these developments, Rift Oil raised £11 million (US$22million) inmid-2007, primarily to finance its share of the joint venture expenditure onthis project. Rift now expects that Austral will pay their share of costssubsequent to the recent joint venture resolutions to accept the minimum workprogramme and budget. The PNG DPE require a minimum expenditure of $18.5 millionduring the current period. Ian Gowrie-Smith Chairman of Rift. "We are very excited that Puk Puk is about to be drilled and hope that resultsfrom this drilling will result in Rift being able to actively pursue the MOUwith Alcan. The proposed drilling, testing and seismic programs are importantsteps in our endeavour to establish a 1 TCF reserve. The pressure is on Rift toestablish itself as a viable source of Gove's energy requirements which areestimated to exceed $10 billion over the next 20 years at current prices" Further enquiries: RiftDavid Lees, Ian Gowrie-Smith 020 7340 9970 Buchanan CommunicationsTim Anderson, Isabel Podda 020 7466 5000 RBC Capital MarketsAndrew Smith, Sarah Wharry 020 7653 4000 The information presented in this announcement has been reviewed and verified byPeter Mikkelsen FGS, AAPG, non-executive Director. Mr Mikkelsen is the QualifiedPerson for the purposes of the AIM Guidance Note on Mining, Oil and GasCompanies dated March 2006. Mr Mikkelson is a geologist with 30 years ofupstream oil industry experience, including 15 years at exploration managerlevel or equivalent. He received a Bsc (Hons) degree in Geology from OxfordUniversity in 1976. This information is provided by RNS The company news service from the London Stock Exchange