Eni Selects Ca Ngu Prospect for Drilling (Vietnam)

Eni S.p.A., an Italian multinational oil and gas company, has selected the Ca Ngu prospect, offshore Vietnam, for drilling and Petrovietnam has approved the well location.

The Ca Ngu prospect was identified by the 500km2 3D seismic programme, completed in mid 2012. The primary objectives are clastic reservoirs of Pliocene age, and the underlying carbonate reservoir of Miocene age. The high quality 3D seismic data reveals a significantly thicker Oligocene synrift section than previously thought, which potentially increases the volume of mature source rock available to generate hydrocarbons and also opens up the possibility of a gas play within the block.

The seismic character within the Pliocene objectives suggests a channelised depositional setting, prognosed to contain clastic reservoirs at multiple levels. A number of levels exhibit anomalous seismic amplitudes and strong Amplitude vs Offset (AVO) anomalies which can be indicative of the presence of gas and/or oil.

The Ca Ngu-1 well will target the Miocene carbonate reservoir drilled in the 120-CS-1X well by BHP in 1993, at a location some 12 km north. That well confirmed a working petroleum system within the block.

The Ca Ngu prospect has been selected as a “play finder” well in that it is considered to offer the best chance of success of finding hydrocarbons at a number of levels. Success at Ca Ngu will de-risk large prospects such as Rua Bien and/or Ca Lang, which remain on the prospect inventory. The results of this well will also provide velocity information relevant to mapping the deeper Oligocene play and a potentially significant fractured basement play, both of which are being studied by the joint venture.

The Company has determined gross prospective resource estimates (recoverable) for an oil case of 181 million barrels of oil (best estimate) and 420 million barrels of oil (high estimate). Neon Energy Limited, partner in the offshore Vietnam Block 120 Joint Venture, Managing Director Ken Charsinsky commented: “The Ca Ngu well is an exciting play finder which could further de-risk the substantial portfolio of prospects within Block 120. It has been selected on the basis of having the most appealing combination of risk factors based on our current pre-drill understanding of the block, and will enable the joint venture to calibrate the seismic responses over a number of other prospects which will guide exploration efforts in the future.”

The Ca Ngu-1 exploration well will be drilled with the Songa Mercur semi-submersible drilling rig, which has arrived in Vietnam and is currently undergoing engineering works prior to mobilising for Block 120. Eni anticipates that the rig will arrive on location by mid September, with drilling to commence a few days thereafter. The well will be drilled to a Total Depth of up to 1,500 metres, in a water depth of 270 metres.

Pursuant to the terms of the Farmout Agreement with Eni, Neon will be carried through the drilling of the well up to a gross cost cap of US$20 million. Any costs in excess of the cost cap will be borne by the parties as per their respective working interests, which are as follows:

Eni Vietnam BV (Operator) 50%

Neon Energy (Song Hong) Pty Ltd 25%

KrisEnergy (Song Hong 105) Ltd 25%

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Press Release, September 05, 2013