Rockpool Acqui Regulatory News (ROC)

28 Oct 2005 07:01

Roc Oil Company Limited28 October 2005 ROC OIL COMPANY LIMITED (ABN 32 075 965 856) REPORT TO SHAREHOLDERS Activities for the Third Quarter Ended 30 September 2005 CEO COMMENT During the Quarter ROC reached a record market capitalisation of approximately$520 million based on a record closing share price of $2.80. This reflected:increasing momentum towards ROC's four field developments due to commence in2006; an aggressive exploration drilling programme and strong oil prices. HIGHLIGHTS DEVELOPMENT • During the Quarter, 76% of the $43.5 million activity expenditure was related to ROC's four field developments which are due to commence production next year. • The Cliff Head Oil Field Development, offshore Western Australia, remained on schedule for first production during Q1 2006. Post Quarter, the Joint Venture approved an increase in the scope of work whereby an additional well at a cost of $12.5 million will be drilled to access approximately one million barrels of additional reserves resulting in an increase to the current $227 million budget. • The Chinguetti Oil and Gas Field Development, offshore Mauritania, continued toward first production Q1 2006. Overall budget plus contingencies increased to US$750 million. • The Blane Oil Field and the Enoch Oil and Gas Field, both in the North Sea, were approved for development. EXPLORATION & APPRAISAL • The 3D and 2D seismic surveys in the Cabinda South Block, onshore Angola, continued throughout the Quarter and subsequent month. • The Tevet-2 appraisal well, offshore Mauritania, encountered a gross gas column of approximately 1.5m above a gross oil column of approximately 37m in the Miocene channel sand, the shallower of the two objectives. The well is part of a multi well exploration and appraisal drilling programme which commenced in August 2005. FINANCIAL • At Quarter end ROC had $118 million in cash and receivables and no debt. 1. PRODUCTION Overall production remained minimal following the sale of the Saltfleetby GasField effective 31 December 2004. Oil production decreased due to naturaldecline in the Keddington Oil Field and a planned shut-in for installation ofartificial lift facilities at Jingemia. +----------------------------------+------------+------------+-----------+|OIL (BBL) | September | June '05 | Change || | '05 | Quarter | % || | Quarter | | |+----------------------------------+------------+------------+-----------+|UK - Onshore Oil (Keddington) | 3,132| 3,695| (15)|+----------------------------------+------------+------------+-----------+|Australia - Onshore Oil (Jingemia)| 63| 471| (87)|+----------------------------------+------------+------------+-----------+|Total Production | 3,195| 4,166| (23)|+----------------------------------+------------+------------+-----------+ 2. SALES REVENUE +-------------------------------+---------------+------------+-----------+|(Unaudited) | September '05 | June '05 | Change || | Quarter | Quarter | % || | $'000 | $'000 | |+-------------------------------+---------------+------------+-----------+|UK Oil Sales | 221| 225| (2)|+-------------------------------+---------------+------------+-----------+|Australia Oil Sales | 8| 42| (81)|| | | | |+-------------------------------+---------------+------------+-----------+|Total Sales Revenue | 229| 267| (14)|+-------------------------------+---------------+------------+-----------+ 3. EXPENDITURE +-------------------------------+---------------+------------+-----------+| | September '05 | June '05 | Change || | Quarter | Quarter | % || | $'000 | $'000 | |+-------------------------------+---------------+------------+-----------+|Exploration | | | |+-------------------------------+---------------+------------+-----------+| Australia | 251| 1,110| (77)|+-------------------------------+---------------+------------+-----------+| New Zealand | 125| 49| 155|+-------------------------------+---------------+------------+-----------+| UK | 708| 1,372| (48)|+-------------------------------+---------------+------------+-----------+| Mauritania | 3,518| 861| 309|+-------------------------------+---------------+------------+-----------+| Angola | 5,229| 1,363| 284|+-------------------------------+---------------+------------+-----------+| Equatorial Guinea | 186| 145| 28|+-------------------------------+---------------+------------+-----------+| China | 350| 387| (10)|+-------------------------------+---------------+------------+-----------+| Other | 194| 401| (52)|+-------------------------------+---------------+------------+-----------+|Total Exploration | 10,561| 5,688| 86|+-------------------------------+---------------+------------+-----------+| | | | ||Development | | | |+-------------------------------+---------------+------------+-----------+|Australia - Cliff Head | 24,218| 11,524 | 110|+-------------------------------+---------------+------------+-----------+|Mauritania - Chinguetti | 6,440| 7,334 | (12)|+-------------------------------+---------------+------------+-----------+|UK/Norway - Blane & Enoch | 2,304| 732| 215|+-------------------------------+---------------+------------+-----------+| Total Development | 32,962| 19,590| 68|| | | | |+-------------------------------+---------------+------------+-----------+|Total Exploration & Development| 43,523| 25,278| 72|+-------------------------------+---------------+------------+-----------+ 4. DRILLING Well completion activity continued at the Chinguetti Development. Explorationand Appraisal drilling activity is summarised below: +-----------+-----------+-----------+-----------+-------------------------+| Category | Well | Location | Operator | Comment || |% Interest | | | |+-----------+-----------+-----------+-----------+-------------------------+|Exploration|Sotto-1/1A,|PSC Area A,|Woodside |The well did not || |4.155% |Mauritania |Mauritania |encounter significant || | | |Pty Ltd |hydrocarbons and was || | | | |plugged and abandoned. |+-----------+-----------+-----------+-----------+-------------------------+|Exploration|Espadon-1/ |PSC Area B,|Woodside |The well did not || |1A, |Mauritania |Mauritania |encounter significant || |3.693% | |Pty Ltd |hydrocarbons and was || | | | |plugged and abandoned. |+-----------+-----------+-----------+-----------+-------------------------+|Appraisal/ |Tevet-2/ |PSC Area B,|Woodside |The well intersected a ||Exploration|-2ST, |Mauritania |Mauritania |gross gas column of || |3.693% | |Pty Ltd |approximately 1.5m and a || | | | |gross oil column of || | | | |approximately 37m in the || | | | |appraisal objective. |+-----------+-----------+-----------+-----------+-------------------------+ 5. SEISMIC +--------+--------------+------------+----------+--------+----------------+| Type | Location | Operator | Interest | Size | Comment || | | | % | | || | | | | | |+--------+--------------+------------+----------+--------+----------------+|2D |Onshore |Roc Oil |60 |510km |Underway. 280km || |Cabinda South |(Cabinda) |Working | |acquired.* || |Block Angola |Company |interest | | |+--------+--------------+------------+----------+--------+----------------+|3D |Onshore |Roc Oil |60 |165km2 |Underway. || |Cabinda South |(Cabinda) |Working | |130km2 || |Block Angola |Company |interest | |acquired.* |+---------+--------------+-----------+----------+--------+----------------+* See also Section 10 'Post Quarter Events'. 6. DEVELOPMENT Australia • Cliff Head Oil Field, WA-286-P, Offshore Western Australia (ROC:37.5% & Operator)The Project remains on schedule and within budget for first oil productionduring Q1 2006. Seven months after project sanction, the project is 65% completewith engineering and procurement effectively finished. Construction of the CHAplatform is 84% complete and the Arrowsmith plant is 60% complete. See alsoSection 10 'Post Quarter Events'. West Africa • Mauritania - Chinguetti Oil & Gas Field (ROC: 3.25%)The Western Navigator finished the drilling and completion of development wells(6 production, 5 water injection and 1 gas injection well) in late September2005. The refurbishment of the 'Berge Helene' FPSO was completed in lateSeptember in Singapore and at Quarter end the vessel was ready to sail toMauritania. Installation of the subsea production facilities commenced. The firm project costs for installation and start-up is US$705 million (US$22.9million ROC net). An additional US$45 million (US$1.5 million ROC net) has beenset aside to cover unplanned contingencies that may occur during the offshore,deep water installation program. The $US62.5 million (US$2 million ROC net)budget increase is primarily due to increased drilling scope and additionalcosts to prepare the subsea flowlines for installation. Production start-upremains scheduled for 1Q 2006. North Sea • Blane Oil Field (ROC: 12.5%)UK and Norway Governments development approvals were received in July 2005. Theproject comprises two production wells and one water injection well tied back tothe Ula platform. Total development cost is estimated to be £165 million (£21million ROC net) and first oil, at a rate of 14,000 BOPD (1,750 BOPD ROC net) iscurrently scheduled for Q4 2006. Design, contracting and procurement progressedand a drilling rig, Global Santa Fe's Glomar Arctic II, was contracted, withdrilling of the production wells scheduled to commence in early 2006. • Enoch Oil and Gas Field (ROC: 12.0%)UK and Norway Governments development approvals were received in July 2005. Theproject comprises a single production well tied back to the Brae 'A' platform.Total development cost is estimated to be £75 million (£9 million ROC net) andfirst oil, at a rate of 12,000 BOPD (1,440 BOPD ROC net), is currently scheduledfor late 2006. Design, contracting and procurement progressed satisfactorily andthe contracted Glomar Arctic II will drill and complete the production wellafter the Blane wells have been drilled and completed in mid 2006. China • Wei 12-8 West Field, Block 22/12 Beibu Gulf (ROC: 40% &Operator)Negotiations continued regarding the potential development of the field with theregional subsidiary of CNOOC. The Overall Development Plan (ODP) was beingprogressed. At the Quarter end discussions were still underway and a decision asto whether or not the field should be developed is expected by year end. 7. EXPLORATION AND APPRAISAL Australasia • Offshore Perth Basin, Western Australia (ROC: 20-50% & Operator)Planning is in progress for a multi-well exploration drilling programmeutilising the Ensco 67 jack-up drilling rig which is scheduled to drill thedevelopment wells at the Cliff Head Oil Field. The Flying Foam-1 explorationwell in WA-327-P is scheduled to commence early November 2005. The remainingexploration drilling programme is planned to commence in March 2006 followingCliff Head development drilling. • Carnarvon Basin, WA-351-P, Western Australia (ROC: 20%)The Jacala exploration well is scheduled to be drilled by BHP Billiton inFebruary 2006. • New Zealand - PEP 38767, Taranaki Basin (ROC: 40% & Operator)Activity focussed on interpretation of 3D seismic data acquired in Q1 2005. West Africa • Mauritania (ROC: 2.0 - 5.0%)Exploration and appraisal drilling in the Woodside-operated PSC A and B areascommenced in August 2005 utilising the Stena Tay drilling vessel. The Sotto-1exploration well in PSC A (ROC 4.155%) was plugged and abandoned as a dry hole.The Espadon-1 exploration well in PSC B (ROC 3.693%) was plugged and abandonedwithout encountering significant hydrocarbons. Both these wells targeted Miocenereservoir sands of approximately the same age as those in the Chinguetti andTiof fields. On 16 September the Tevet-2 exploration and appraisal well in PSC B starteddrilling with the dual objective of appraising the Miocene reservoir drilled bythe Tevet-1 discovery well in 2004, and testing a deeper Cretaceous explorationtarget. The appraisal element of the well was successfully drilled in lateSeptember 2005, encountering a gross oil column of 37m below a 1.5m gross gascolumn. Deepening to the exploration target was in progress at Quarter-end. Seealso Section 10 'Post Quarter Events'. During the Quarter, evaluation work by the Operator, Woodside, continued on thegeologically complex Tiof field. • Equatorial Guinea (ROC: 18.75% & Technical Manager)Activity focussed on planning for the drilling of an exploration well on theAleta Prospect in Q4 2005. This timing is particularly dependant on theavailability of deep water drilling vessels. • Angola (ROC: 60% & Operator)During the Quarter, 510km of 2D and 165 sq km of 3D seismic were acquired in theonshore Cabinda South Block, with programme completion expected in November2005. See also Section 10 'Post Quarter Events'. UK Onshore (ROC: 100% & Operator) Preparatory work for the drilling of the Willows-1 exploration well in PEDL030scheduled for Q1 2006 continued. China - Beibu Gulf Block 22/12 (ROC: 40% & Operator) Exploration activity focussed on planning for the drilling of an explorationwell in Q4 2005 or Q1 2006, subject to rig availability. 8. ASSET ACQUISITIONS & DIVESTMENTS • Mauritania - Block 7 (ROC: 5.5% reduced to 4.95%)Assignment documentation relating to Woodside's farmin to Block 7 PSC Area D wascompleted in August 2005. As a result ROC's equity in Block 7 decreased from5.5% to 4.95%, effective 1 January 2003. This transaction was originallyannounced in April 2004. • Onshore UK - PEDL 075 (ROC: 100% & Operator)The exploration permit was allowed to lapse on 7 September. 9. CORPORATE • HedgingAt the end of the Quarter ROC held put options for 560,000 BBL at a Brent oilprice of US$50/BBL and crude oil price swaps for 909,000 BBL at a weightedaverage Brent oil price of US$49.58/BBL for the period March 2006 to December2007. In general terms this equates to almost 30% of forecast production for theperiod. Specifically, during the Quarter:- Put options for 560,000 BBL at a Brent oil price of US$50/BBL for the period March 2006 to December 2007 were purchased, giving the company the right but not the obligation to sell this volume of oil at US$50/BBL.- Put Options for 200,000 BBL at a Brent oil price of US$40/BBL for the period March 2006 to December 2006 held by the Company were sold. • US$60 million Loan FacilityDuring the Quarter ROC received proposals for the establishment of a US$60million Borrowing Base Loan Facility to assist in funding ROC's 2006 developmentactivities. ROC is progressing on due diligence and documentation for theFacility. 10. POST QUARTER EVENTS • Saltfleetby Gas Field - Sale CompletionSubsequent to the Quarter end ROC has received the final working capital andescrow payment of $11.4 million in relation to the sale of the Saltfleetby GasField. • Seismic Programme, Onshore AngolaROC successfully completed acquisition of the 165 sq km 3D seismic survey. The2D seismic survey is scheduled to be completed mid November 2005, subject toweather. • Cliff Head Oil Field DevelopmentReceipt of the jack -up drilling rig ENSCO 67 occurred 27 October 2005. The rigis scheduled to arrive at the Cliff Head site in early November 2005 to installthe Cliff Head A production platform and commence the drilling of productionwells. During the Quarter the Field Development Plan and Production Licence applicationwere submitted to the relevant state and federal government authorities andsubsequent to the Quarter end the Production Licence was offered and accepted. The horizontal under beach pipeline crossing was successfully completed duringOctober and the offshore pipelay works commenced. Jacket installation remains on schedule for Q4 2005 with the fabrication of thejacket structure completed in Malaysia and loaded out on 22 October 2005. Thejacket structure is currently being towed to the Cliff Head site to be installedduring early November. In addition, the Joint Venture approved an increase in the scope of work wherebyan additional well will be drilled to access approximately one million barrelsof reserves with an increase to the current budget of $12.5 million, bringingthe total project budget to $240 million. • Evaluation of Tevet - 2 ST1-PSC Area B (ROC: 3.693%)A preliminary evaluation of wireline log data, including fluid sampling anddownhole pressure measurements, has concluded that the exploration well hasintersected oil in a good quality but thin sandstone interval. While the hydrocarbon column is small and may not prove to be material theresult is encouraging for future Cretaceous exploration targets inWoodside-operated Mauritanian acreage. FURTHER INFORMATION For further information please contact ROC's Chief Executive Officer, Dr JohnDoran on:Phone: (02) 8356 2000Facsimile: (02) 9380 2066Email: jdoran@rocoil.com.auAddress: Level 14, 1 Market Street, Sydney, NSW 2000, Australia.Web Site: www.rocoil.com.au Dr Kevin HirdGeneral Manager Business DevelopmentTel: +44 (0)207 586 7935Fax: +44 (0)207 722 3919Email: khird@rocoil.com.au Nick LambertBell Pottinger Corporate & FinancialTel: +44 (0)207 861 3232 +-------------+----------------------------------------------------------------+|Definitions | |+-------------+----------------------------------------------------------------+|IFRS |means International Finance Reporting Standards |+-------------+----------------------------------------------------------------+|BBL |means barrels |+-------------+----------------------------------------------------------------+|BCF |means billion cubic feet |+-------------+----------------------------------------------------------------+|BOE |means barrels of oil equivalent |+-------------+----------------------------------------------------------------+|BOPD |means barrels of oil per day |+-------------+----------------------------------------------------------------+|BOEPD |means barrels of oil equivalent per day |+-------------+----------------------------------------------------------------+|BCPD |means barrels of condensate per day |+-------------+----------------------------------------------------------------+|BPD |means barrels per day |+-------------+----------------------------------------------------------------+|GWC |means gas-water contact |+-------------+----------------------------------------------------------------+|MCF |means thousand cubic feet |+-------------+----------------------------------------------------------------+|Mbrt |means metres below rotary table |+-------------+----------------------------------------------------------------+|mTVDSS |means metres true vertical depth below sea level |+-------------+----------------------------------------------------------------+|MMSCF |means million standard cubic feet |+-------------+----------------------------------------------------------------+|MMSCF/D |means million standard cubic feet per day |+-------------+----------------------------------------------------------------+|MMBO |means million barrels of oil |+-------------+----------------------------------------------------------------+|MMBOE |means million barrels of oil equivalent |+-------------+----------------------------------------------------------------+|NGL |means natural gas liquids |+-------------+----------------------------------------------------------------+|OWC |means oil-water contact |+-------------+----------------------------------------------------------------+|PEDL |means Petroleum Exploration Development Licence (Onshore United || |Kingdom) |+-------------+----------------------------------------------------------------+|PSC |means Production Sharing Contract |+-------------+----------------------------------------------------------------+|Quarter |means the period 1 July 2005 to 30 September 2005 |+-------------+----------------------------------------------------------------+|ROC |means Roc Oil Company Limited and includes, where the context || |requires, its subsidiaries |+-------------+----------------------------------------------------------------+|SCF |means standard cubic feet |+-------------+----------------------------------------------------------------+|TCF |means trillion cubic feet |+-------------+----------------------------------------------------------------+|US |means US dollars |+-------------+----------------------------------------------------------------+ This information is provided by RNS The company news service from the London Stock Exchange