The board of directors of Singapore Petroleum Co Limited (“SPC” or the “Company”) is pleased to announce that the Co has, through its wholly-owned subsidiary, SPC Vietnam (Blocks 102/106) Co Ltd, completed a farm-in for an additional 10% participating interest in Blocks 102 and 106 Production Sharing Contract (“Blocks”) from ATI Petroleum Inc. (“ATIP”), raising SPC’s interest in the Blocks to 20%.
SPC first farmed into the Blocks in April 2004 with an acquisition of a 10% participating interest from ATIP. The Blocks are located in the Gulf of Tonkin, offshore northern Vietnam. The first exploration well, Yentu-1X, was drilled in Block 106 in late 2004 and resulted in the discovery of oil and gas. Preliminary analysis of the oil sample indicated that the oil is light and sweet with 43.2Â° API and a pour point of 4.5Â°C. A second exploration well is being planned in Block 106 and drilling is anticipated to take place in the first half of 2006. The acquisition of a 3D seismic survey (over two areas totalling around 600 square kilometres) to evaluate several other prospects within the Blocks, has just been completed.
“There are several prospects with potential of finding oil and gas in the Blocks as the acreage is located in the Song Hong Basin where oil and gas have been discovered,” comments Dr Tony Tan, Senior vice-President, Exploration and Production, of SPC. SPC’s partners in the Blocks are Petronas Carigali Overseas Sdn. Bhd., the Operator of the Blocks, PetroVietnam Investment & Development Co and ATIP.
As consideration for the additional 10% participating interest, SPC will pay ATIP cash and also carry ATIP’s share of cost for certain future work programmes in the Blocks, subject to a maximum aggregate amount of US$9 million. SPC intends to fund the consideration through internal resources.
The investment for the additional 10% farm-in interest is not expected to have any material impact on the earnings per share and net tangible assets per share of the Co for the current financial year.