Roc: Drilling starts in Bohai Bay. Awe takes 40% stake
Roc Oil (Bohai) Company, a wholly owned subsidiary of Roc Oil Company Limited , as operator of Block 09/05, Bohai Bay, Offshore China advises that drilling has started on the first exploration well QK11-1-1.
Drilling from CPOE Rig 33 kicked off at 11:00 China Standard Time on 14 August 2014. Total depth planned for this well is -4,000 metres TVD (-4,500 metres measured depth). The 335 square kilometres block is located approximately 15 kilometres north of ROC’s existing Zhao Dong production and appraisal blocks in water depths of 5-15 metres.
ROC was awarded 100% interest in the exploration block by China National Offshore Oil Corporation (CNOOC) in May 2012 and signed a Petroleum Contract shortly thereafter. Upon a successful discovery, CNOOC has the right to participate in up to 51% of any development.
Also, ROC has executed a Farm-ln Agreement to farm-out a 40% interest in Block 09/05 to AWE China Re. Ltd, a wholly owned subsidiary of AWE Limited (ASX: AWE) for US$2 million cash for past costs, 60% of the first exploration well costs and 54% of the second exploration well costs.
Initial gross drilling costs per well are estimated at US$14.7 million, should drilling costs exceed the initial estimate; AWE will contribute at a 40% working interest.
CNOOC has approved the farm-out and ROC will remain the Operator, with a 60% working interest.
Alan Linn, Chief Executive Officer, said: “This is an important milestone in realising ROC’s growth strategy In one of the most prolific basins in the world. We are extremely excited about this prospect’s potential.”