Activities Operations

Thailand

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The Company is building a strong exploration acreage position in the Gulf of Thailand and currently holds some 64,000 sq km in the region.  This area is attractive for a number of reasons:-

  • It is a prolific oil and gas producing province with well-understood geological plays yet large areas have been only sparsely explored and with dated technology;
  • The region is a mature and straightforward operating environment, with abundant oilfield services, supplies and fabrication capability; and

There is a strong local market for both oil and, importantly, natural gas.

Thailand Activities Operations

 

G10/48 - Gulf of Thailand (25.00%)

Background:

On 11 December 2006 the Thailand Ministry of Energy approved the award of Block G10/48 and G11/48 to a consortium of which Horizon Oil is a member.  The Company holds a 25% interest in both concessions in association with wholly-owned subsidiaries of Pearl Energy (50% and operator) and Tana Oil & Gas (25%).

The G10/48 concession is located in the southern part of the Gulf of Thailand immediately south of the Pailin field and west of the Bongkot field.  Covering some 18,780 sq km, the concession contains the southward extension of the Pattani Trough which is the main producing basin in Thailand, with production of 2.2 bcf gas per day and 95,000 bopd.

The Pattani Trough is primarily a gas producing basin with many individual accumulations concentrated in the basin depocenter, where source rocks are buried to depths in excess of 5,000 m and generate mainly gas.  The oil production comes primarily from fields such as Benchamas, Tautawan and Jasmine at the northern end of the basin where source rocks are buried less deeply.  The southern end of the Pattani Trough in Block G10/48 is thought likely to mirror the maturity profile of the northern end and to therefore be prospective for oil as well as gas.  The last exploration activity in the Block G10/48 area was conducted by Texaco prior to 1996.  Texaco drilled two wells, one of which, Mayura-1 drilled in 1994, was an oil discovery that flowed up to 500 bopd on test.  The Mayura discovery, estimated to contain resources of 10 - 15 mmbo, was deemed non-commercial at the time and Texaco eventually relinquished the block.

The concession allows the partners to explore for hydrocarbons over a period of seven years and require an agreed minimum work program to be carried out.  The existing seismic database has been reprocessed and this plus data obtained from a new seismic program of 2,500 km in Block G10/48 and 3,000 km in G11/48 conducted in 2007 by the SMNG vessel Professor Polshkov has been utilised in evaluating the prospectively of both blocks.

Current activities:

Mapping of the reprocessed and newly acquired seismic data has yielded a strong inventory of prospects for the upcoming drilling campaign.  The operator, Pearl Energy, has contracted the jack-up rig Ensco 51 to drill the program, which will be part of Pearl Energy’s larger drilling program in the Gulf of Thailand and should therefore benefit from economies of scale.  The first phase of drilling will consist of 3 wells in G10/48

Site and environmental surveys will be conducted on 7 locations within G10/48 prior to selection of the 3 prospects to be drilled in the first phase, which will be determined in August.  This will allow drilling to begin in November, in advance of the mid-December 2008 government obligation date for G10/48.

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G11/48 - Gulf of Thailand (25.00%)

Background:

The G11/48 concession is located in the southern part of the Gulf of Thailand immediately west of the Bongkot field and the Malaysia-Thai Joint Development Area (JDA), which is a prolific gas province.  The block is 13,600 sq km in area and contains the northern end of the Malay Basin.  Bongkot has gas reserves of about 4 trillion cubic feet (tcf), while over 7 tcf of gas have been discovered in the JDA.  Gas is currently being produced from Bongkot and the JDA into the Thai market, where industrial demand is high and gas prices attractive for producers.

The Malay Basin is a major oil and gas province extending some 500 km north to south from the Bongkot Field, offshore Peninsular Malaysia.  The Basin is filled with up to 15,000 m of Tertiary aged lacustrine and marine sediments containing prolific hydrocarbon source and reservoir rocks.  Approximately 12 billion barrels equivalent of hydrocarbon reserves have been discovered so far in the basin in at least 70 oil fields and 90 gas fields.  The US Geological Survey estimates that some 6 billion barrels equivalent of reserves remain to be found in the basin and Horizon Oil believes that much of that may be found in structural and stratigraphic traps on the basin margins, in settings similar to Block G11/48.  Gas is the dominant reservoir fluid in the northern part of the basin where source rocks are deeply buried, and Block G11/48 is considered to be prospective for gas and condensate rather than oil.  Previous operators have drilled 3 wells in the block, all of which tested gas and condensate in multiple zones.

The concession allows the partners to explore for hydrocarbons over a period of seven years and requires an agreed minimum work program to be carried out.

Current activities:

Mapping of the reprocessed and newly acquired seismic data has yielded several leads and prospects for the upcoming drilling campaign.  The operator, Pearl Energy, has contracted the jack-up rig Ensco 51 to drill the program, which will be part of Pearl Energy’s larger drilling program in the Gulf of Thailand and should therefore benefit from economies of scale.

The first phase will consist of 2 wells in G11/48 to be commenced after drilling on Block G10/48 has been completed.  Work on finalizing prospect definition for the drilling campaign is in progress.

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G1/48, G3/48 & G6/48 - Gulf of Thailand (20.00%)

Background:

On 28 February 2008, Horizon Oil announced that it had concluded the terms of a farm in arrangement with Pearl Energy in respect of 3 exploration concessions in the Gulf of Thailand, Blocks G1/48, G3/48 and G6/48.

Under the terms of the arrangement, Horizon Oil will pay 40% of the seismic and drilling costs of the initial 3 year work program for each concession.  A seismic programme was acquired in 2007/08 to meet permit obligations.

The G1 and G3 concessions are located at the northern end of the Gulf of Thailand north of the Pailin field, while G6 lies immediately north of Block G10.

Current activities:

The joint venture is currently in the process of analysing the current seismic database with a view to defining prospects for proposed drilling programme of 6 wells.  The first phase of drilling will consist of 2 wells, 1 each on Block G3/48 and G6/48, set to commence following completion of the wells on Block G11/48.  The second phase of a planned 4 wells is scheduled to commence later in 2009.

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