Rockpool Acqui Regulatory News (ROC)

30 Nov 2007 07:01

Roc Oil Company Limited30 November 2007 30 November 2007 ROC OIL COMPANY LIMITED ("ROC") STOCK EXCHANGE RELEASE PRODUCTION UPDATE: ZHAO DONG BLOCK, BOHAI BAY, OFFSHORE CHINA Key Points • A recent production increase at the C & D Oil Fields in the Zhao Dong Block,Bohai Bay, offshore China, has seen gross oil production rise to 25,000 barrels of oil per day ("BOPD") from mid-year production levels which were in the high teens. • This lift in production coincides with a record realised oil price of approximately US$81/BBL and a shipment of 306,000 barrels net ROC in late November. ROC, on behalf of its wholly-owned subsidiary Roc Oil (Bohai) Company, which hasa 24.5% operated interest in the Zhao Dong Block in the Bohai Bay, offshoreChina, is pleased to provide the following production and drilling progressreport regarding the C and D Oil Fields. • The 2007 Zhao Dong drilling programme began in April and is scheduled to finish in early December when the last well, a water injector, will be drilled. The total programme comprises 13 wells consisting of 11 oil producers and two water injectors. • The four most recent producers, all completed since mid-September, have boosted gross production to the current level of 25,000 BOPD. This rate compares with quarterly production averages of 21,000 BOPD, 18,700 BOPD and 17,320 BOPD for the first, second and third quarters of 2007, respectively. The current expectation is that Zhao Dong production will exit 2007 at a rate in excess of the 22,000 BOPD 2006 exit rate. • This recent lift in production coincides with a record realised oil price of approximately US$81/BBL and a 306,000 BBL ROC shipment on 24 November, 2007. The November price represents a 62% improvement on the year low realised price of approximately US$50/BBL in February 2007. • Total 2007 gross production for Zhao Dong is expected to be in the order of 7.2 MMBO, representing an average of 19,700 BOPD (ROC net: 4,800 BOPD). This is 22% less than the gross production target set by ROC at the beginning of the year which was identified at the time as being ambitious. The 2007 production shortfall, which has been reported previously, mainly relates to the underperformance of four wells which did not meet expectations due to reservoir and geological complexities, some of which are now better understood, as well as other producing wells which experienced minor mechanical difficulties which have largely been resolved. The overall revenue impact of this underperformance has been offset to some extent by the oil price strengthening referred to above. • Typically, the seven successful producers drilled during 2007, all of which either met or, in the case of the most recent wells, largely exceeded, original expectations and pay out quickly, sometimes within three weeks. Commenting on the drilling and production results, ROC's CEO John Doran statedthat: " The recent uptick in production is hard won and warmly welcomed. It keepsROC's current company-wide production comfortably above the 10,000 - 12,000 BOPDpreviously quoted target range. • ROC's basic business plan for Zhao Dong was to treat the C and D Oil Fieldsas well factories: keep drilling costs under control, during a period of rampantindustry inflation and focus on well profitability in the context of a fulldrilling season - and that is exactly what happened. The first five producerscompleted this year effectively paid out the costs associated with the entire2007 programme leaving the wells completed most recently and the pre-2007producers notionally free of operating costs. • Concurrent with the 2007 drilling activity in the C and D Oil Fields workcontinued on the expansion of those facilities and also on new facilities forthe C4 Oil Field Development." In accordance with ASX and AIM Rules, the information in this Release has beenreviewed and approved by Dr John Doran, Chief Executive Officer, Roc Oil CompanyLimited, BSc (Hons) Geology, MSc and PhD. Dr Doran, who is a member of theSociety of Petroleum Engineers, has more than 30 years relevant experiencewithin the industry and consents to the information in the form and context inwhich it appears. Damian FisherGeneral ManagerExternal Affairs & Investor Relations For further information please contact: Dr John Doran on Tel: +61-2-8356-2000 Fax: +61-2-9380-2635 Email: jdoran@rocoil.com.au Or visit ROC's website: www.rocoil.com.au Dr Kevin Hird General Manager - Business Development Tel: +44 (0)20 7495 5707/+61 (0)2 8356 2000 Mob: +44 (0)7751 3671 49/+61 (0)417 261 727 Email: khird@rocoil.com.au Michael Shaw Oriel Securities Limited (Nominated Adviser) Tel: +44 (0)20 7710 7600 Bobby Morse Buchanan Communications Tel: + 44 (0)20 7466 5000 Fax: + 44 (0)20 7466 5001 E-Mail: bobbym@buchanan.uk.com Mob: +44 (0)7802 875 227 This information is provided by RNS The company news service from the London Stock Exchange