Kora-1 Well Offshore Senegal and Guinea Bissau Disappoints

Rocksource ASA (“Rocksource”), announces the completion of drilling operations on the Kora-1 well in the AGC Profond Production Sharing Contract (PSC)*. Final wireline logging is now being carried out and the well will be plugged and abandoned as an unsuccessful exploration well..

Kora-1 was a frontier exploration well drilled by the Maersk Deliverer drillship in 2,600 metres of water and targeting a salt-cored, dip-closed anticline. The well was drilled to a total depth of 4,447.5 metres subsea.

Formation Evaluation While Drilling (FEWD) data shows that the primary (Albian) and secondary (Coniacian and Barremian) reservoir intervals were penetrated close to their anticipated depths, but the well encountered a predominantly claystone and thinly‑bedded limestone sequence rather than the prognosed sandstone reservoir facies. In the absence of reservoir facies it is difficult to immediately assess the potential presence of hydrocarbons on the available FEWD data. A fuller analysis of the data will be required before the wider implications for the prospectivity of the Senegal-Guinea Bissau portion of the MSGBC Basin can be determined.

Rocksource entered the PSC in September 2008 through a farm-in deal with Ophir. The farm-in provided for Rocksource to earn a 25% interest through promoted contributions to an EM survey and the first two exploration wells. As previously announced, in June 2011, Rocksource completed a farm-out of half of its potential interest. Under the terms of the June 2011 farm-out, Noble Energy, Inc. (Noble) acquired Rocksource’s right to a 12.5% interest in the PSC in return for a promoted contribution towards past expenditure, the costs of the Kora-1 well and a contingent contribution to any appraisal expenditure.

The initial committed value of this transaction was USD 28 million, of which USD 8 million covered Rocksource’s promote commitment to Ophir on Kora-1, arising from its September 2008 farm-in. Rocksource estimates its remaining share of the cost of the well will be approximately USD 5.5 million.

The beneficial interests in the AGC Profond PSC and the Kora-1 well are as follows:

Ophir (Operator) 44.2%
Noble 30.0%
l’Entreprise (State company) 12.0%
FAR 8.8%
Rocksource 5.0%

Rocksource retains the right to earn a 12.5% interest, if it were to participate in a second exploration well.

The Kora-1 well has fulfilled the work commitment for the current phase of the AGC Profond PSC.

Rocksource CEO Trygve Pedersen commented “We are obviously disappointed with the result of the Kora-1 well and believe that the strong EM anomaly we identified pre-drill has been caused by a combination of lithologies (rock types) which have produced unusually high resistivity. However, the AGC Profond PSC covers a substantial area and we will work with our Joint Venture partners to integrate these results to better understand the remaining area potential. We are looking forward to operations on our final two wells of 2011 on the Norwegian Continental Shelf and preparing drilling opportunities for 2012/3 from our remaining portfolio.”

*The AGC Profond PSC is administered by the “Agence Gestion de Cooperation entre Senegal et Guinea Bissau” (l’Entreprise) which is the joint commission set up by the Governments of Senegal and Guinea-Bissau to administer the maritime zone between the two jurisdictions.

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Source: Rocksource, July 27, 2011