BMG Oil & Gas Project: Operational Update


 

TIDMROC 
 
RNS Number : 9655O 
Roc Oil Company Limited 
17 March 2009 
 

17 March 2009 
 
 
 
 
ROC OIL COMPANY LIMITED ("ROC") 
 
 
STOCK EXCHANGE RELEASE 
 
 
 
 
BASKER-MANTA-GUMMY ("BMG") OIL & GAS PROJECT: 
OPERATIONAL UPDATE 
 
 
 
 
Following a detailed technical and commercial review, the BMG Joint Venture 
("BMG JV") has taken a number of initiatives to revise the development plan and 
schedule for the ROC-operated BMG Project which has resulted in substantial 
project cost savings. In 2009 and 2010, the BMG JV will focus on enhancing the 
production performance of the Phase-1 oil project. Development commitments for 
the Phase-2 gas project have been reduced in 2009. 
 
 
2009 Drilling Programme 
 
 
The 2009 drill rig programme has been significantly reduced through the 
assignment of BMG JV commitments for the Kan Tan IV rig and a recently completed 
rig swap with Shell Development (Australia) Pty Limited, under which the Songa 
Venus rig has been "swapped" for the Ocean Patriot rig. These actions have 
reduced BMG JV cost commitments in 2009 by over US$100 million and provided a 
more flexible drilling programme for the project. 
 
 
Through assignments to existing consortium members, the Kan Tan IV rig 
commitment has been reduced from 143 days (beginning in March 2009) to 30 days 
in late 2010. 
 
 
The Songa Venus rig was contracted in July 2008 to drill development wells on 
the BMG field in early 2009. The rig swap for the Ocean Patriot, which is 
currently located in Bass Strait, has removed substantial mobilsation costs 
associated with towing the Songa Venus rig from the Timor Sea to Bass Strait and 
allows for better management of operational risks. 
 
 
The Ocean Patriot rig programme provides the BMG JV with the option to undertake 
operational work-overs on existing B3 and B5 wells and the option to drill and 
complete the B7 development well; activities planned to improve production 
performance in 2009 and 2010. The 60-90 day Ocean Patriot work programme on the 
BMG fields is planned to begin in May 2009. In addition to the rig move savings, 
further cost savings could be generated by assigning the rig to third parties. 
 
 
Flaring Management 
 
 
Gas flaring conditions for the BMG Project have been revised to allow production 
to continue while modifications are made to the Crystal Ocean FPSO that will 
remove the need for flaring during normal operations. 
 
 
The limit for the total volume of gas flaring remains unchanged. The requirement 
for gas flaring to cease by 16 March 2009 has been removed. 
 
 
New topside facilities on the Crystal Ocean will include a low pressure flare 
recovery compressor package to supplement the reinjection of produced gas. The 
BMG JV anticipates that work on the upgrade of the Crystal Ocean facilities will 
be completed during 4Q09, before the gas flaring volume limit is reached. The 
total cost for the installation and commissioning of the new facilities will be 
approximately A$10 million. Until completion of the upgrade, flaring volumes 
will remain well below the allowable daily average rate. 
 
Participating interests in the BMG Joint Venture are as follows: 
 
 
Anzon Australia Pty Limited (Operator) ......................40% 
Beach Petroleum Limited ............................................30% 
CIECO Exploration and Production (Australia) Pty Ltd ......20% 
Sojitz Energy Australia Pty Ltd .....................................10% 
 
 
Commenting on these operational issues, ROC's Chief Executive Officer, Bruce 
Clement, stated: 
 
 
"The changes to the development plan and schedule for 2009 implemented by the 
Joint Venture are aimed at reducing overall development costs for the BMG 
project and ensuring that investments for the project are being carefully 
managed in this period of lower oil prices and disrupted financial markets. In 
this regard, ROC in its capacity as operator has worked with the Joint Venture 
to achieve a very positive outcome. 
 
 
ROC's approach to the BMG project is consistent with its approach to investments 
across the Company's portfolio of development and exploration assets, which is 
to carefully steward financial resources and to ensure optimal commercial 
returns are achieved from each of its assets." 
 
 
 
 
 
 
Matthew Gerber 
Manager 
 Investor Relations & External Affairs 
 
 
For further information please contact: 
Mr Bruce Clement 
Chief Executive Officer 
Email: bclement@rocoil.com.au 
Tel: +61-2-8023-2000 
Fax: +61-2-8023-2221 
Or visit ROC's website: www.rocoil.com.au 
 
 
 
 
Michael Shaw 
Oriel Securities Limited (Nominated Adviser) 
Tel: +44 (0)20 7710 7600 
 
 
Bobby Morse 
Buchanan Communications 
Tel: + 44 (0)20 7466 5000 
Fax: + 44 (0)20 7466 5001 
E-Mail: bobbym@buchanan.uk.com 
Mob: +44 (0)7802 875 227 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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