Australian company AWE Ltd. and ROC Oil Company signed a farm-in agreement for AWE to acquire 40% working interest in Block 09/05, Bohai basin, offshore China.
|Map of Block 09/05. Image from ROC|
Under the terms of the farm-in agreement, AWE will pay ROC US$2 million for past costs, 60% of the first exploration well and 54% of the second exploration well. Should drilling costs exceed the initial gross estimate of $14.7 million per well, AWE would then contribute at a 40% working interest.
The transfer of interest to AWE is subject to normal regulatory approvals.
AWE says the agreement provides an ideal platform to expand into China.
ROC says drilling from the CPOE Rig 33 began on 14 August in Block 09/05, which is in the western part of the prolific Bohai Bay basin, approximately 10km southeast of Tanggu, the largest port in China. The block covers 335sq km with water depths from approximately 5m to 10m.
Total depth is planned at 4000m. The 335sq km block is about 15km north of ROC’s existing Zhao Dong production and appraisal blocks that are in 5m-15m water depth
The first exploration well, QK11-1-1 will test a low risk, material size prospect that is covered by recently acquired 3D seismic survey data. The block has the benefit of low drill and development costs, proximity to existing infrastructure and attractive fiscal terms.
Several other prospects and leads have been identified within the block, providing significant follow-up potential for the second commitment well, anticipated in 3Q 2015, says AWE.
ROC Oil is the operator and holds a 60% interest with AWE (40%).
Additional Bohai Bay exploration
Hong Kong's Brightoil Petroleum finalized its $1.046 billion acquisition earlier this month of two offshore oil-producing blocks from Anadarko China Holdings 2 Co. The two blocks, located in Bohai Bay, northeast China, include the 124sq km contract area 04/36 and the 88sq km unit area 05/36, both operated by CNOOC China.
Brightoil acquired 40.09% interest in 04/36, and is now partnered with CNOOC (51%) and Singapore Petroleum Co. (9%). Brightoil also has acquired 29.18% interest in 05/36 with partners CNOOC (51%), Newfield Exploration Co. (12%), and Singapore Petroleum (8%).