Soco has completed the first stage of its 2002 Vietnam drilling program with the drilling of the Block 16-1 Ngua O well. The well was drilled to a depth of 3,684 meters, penetrating approximately 520 meters into basement. Mud logging indicated substantial oil shows in both the upper Miocene and basement sections. It was determined that the reservoir characteristics in the upper Miocene were not sufficiently developed to warrant testing. A drill stem test ("DST") was conducted in a basement interval of 3,174 meters to 3,563 meters after encountering multiple fracture systems. The DST recovered oil at rates of approximately 250 barrels per day over an 18-hour interval. The well has been abandoned. A decision regarding a horizontal or deviated well to further appraise this prospect will be deferred until after the data gathered from this first well have been thoroughly analyzed.
The rig will be moved immediately to a location on Block 9-2 to spud the initial well on this Block, the second well in a minimum four well program.
SOCO currently holds a 15% working interest in Block 16-1, but is carried up to a maximum amount of US$50 million by PTT Exploration and Production Company Limited of Thailand through the initial exploration programs in both Block 16-1 and 9-2 under the terms of a farm-out agreement announced earlier this year. Both Blocks are contiguous to the Bach Ho (approximately 285,000 BOPD) and the Rang Dong (approximately 55,000 BOPD) producing fields.
Ed Story, President and Chief Executive of SOCO, commented: "The results of the first of our four well drilling program in the Cuu Long Basin are encouraging, although we would have obviously preferred a definitive result from the initial well. The next stage is to decide whether or not a horizontal appraisal well, which typically dramatically increases flow rates in this basin, can be justified on this prospect. However, we believe that the results from this well have positive implications for the largest prospect identified on Block 16-1. There is clearly an active hydrocarbon system on the Block. With the data gained from this well, it appears that both the "source" and "seal" risks on the larger prospect are lower than previously projected."