Activity Update Aug 2014
Republic of Congo (Brazzaville), Marine XI
SOCO announces that the Lidongo X Marine-101 (“LXM-101”) exploration well has spudded in the Marine XI Block, located in the Congo Basin, offshore the Republic of Congo (Brazzaville). The LXM-1 well is designed to test the extension of an adjacent gas/condensate/oil field into the Marine-XI license block. The LXM-101 well is located 23 kilometres north west of Pointe Noire in a water depth of approximately 45 metres. The planned total depth for the well is provisionally estimated to be 2,600 metres Total Vertical Depth subsea (“TVDss”), although provision has been made to continue drilling to a maximum depth of circa 3,100 metres TVDss, terminating in the lower most part of the Djeno sandstone formation. The well will be drilled using the jack-up drilling rig Noble Percy Johns, and is expected to take 35 to 45 days to drill.
Vietnam, Block 16-1 - Te Giac Trang ("TGT) field
The TGT partners continue to focus on achieving approval for the H5 Field Development Plan (“FDP”) and meeting the first oil target in September/October 2015. The Hydrocarbons Initially In Place/Reserve Assessment Report (“RAR”) was approved on 18th June 2014, and the work is ongoing on the FDP which is expected to be submitted for approval by the relevant Vietnamese authorities by the end of the third quarter. In the meantime, all the related development works required to meet the first oil schedule remain on target.
Drilling by the ENSCO 109 rig of the 2014 in-fill development programme at the TGT field continues. The first two wells, TGT-17PST1 and TGT-18PST1, have been completed and are producing in line with expectations. The rig is currently drilling the TGT-11X well. Following the earlier issues with the Hercules rig, the partners are currently targeting drilling a total of 4-6 development wells during 2014, with any approved wells not completed likely to be added to the 2015 programme.
Vietnam, Block 9-2 – Ca Ngu Vang (“CNV”) field
Completion of the CNV-7PST1 well by the Naga 2 rig is expected in September. The well has encountered unexpected geological problems in the upper hole section just above the reservoir. Borehole instability issues, caused by a below seismic resolution fault in the Oligocene section, just above the Basement, requires the section to be re-drilled and for an alternative casing programme to be employed to ensure the well can be drilled safely into the Basement. Redrilling of the section is not expected to impact the commencement of development drilling on TGT’s H5 well head platform which remains on target following platform installation. Once onstream, the CNV-7PST1 well is expected to enable production levels of the CNV field to be increased.
Democratic Republic of Congo (Kinshasa) (“DRC”), Block V
After receiving all necessary regulatory approvals, the lake bed seismic survey on Lake Edward was completed in July. The acquired data will now be processed and interpreted. Work is ongoing to withdraw all the equipment and services used during the survey from the area under the supervision of the environmental authorities.
Furthermore, on 11th June 2014 SOCO announced that WWF and the Company had agreed the way forward on future activity in Virunga National Park. SOCO committed, that, in the absence of an agreement between the DRC and UNESCO, SOCO will not progress its operations in Virunga National Park.
The Company has non-operational investment obligations regarding environmental baseline studies and social projects. The Company has committed to honour these obligations, which include the recent installation of facilities capable of providing 200,000 litres per day of potable water to local communities.
SOCO will release its interim results on 28th August 2014. Although there have been some operational delays impacting planned work on our producing fields in Vietnam, our full year production guidance remains at 14-15 thousand barrels of oil equivalent per day .
Alongside the interim results, SOCO will also announce the proposed amount and timing of the return of cash to shareholders based on the results of the 2013 financial year. Following the first cash distribution to shareholders in 2013, the Company’s ongoing cash return policy is targeting a return of at least 50% of annual free cash flow. It is currently expected that, subject to shareholder approval, the distribution will be made in the same manner as last year by means of a B and C share scheme.
7 August 2014
SOCO International plc
Anya Weaving, Chief Financial Officer
Tel: 020 7747 2000
Tel: 020 7861 3232