1. YENTU-1X WELL    

In September 2004, Yentu-1X well was drilled to test the pre-Tertiary fractured karstified carbonate rock play and Miocene/Oligocene stratigraphic plays. About 2.9 m net oil sand was encountered in Middle Miocene U210 sand with average porosity of 18% and average SW of 57%. Discovery well Yentu-1X contain potential recoverable resources of   30 MMSTB oil in Miocene clastics and proved hydrocarbons in Basement carbonates. Geological risks are minimised in remaining prospects & leads. 

The Yen Tu-1X was the first oil discovery in offshore northern Vietnam and has proven the existing of petroleum system (oil) in Song Hong basin. The DST#1 in carbonate basement revealed the presence of gas but is inconclusive with regards to hydrocarbon properties due to an immature test. 

EXECUTIVE SUMMARY 

The Yen Tu-1X (106-YTu-IX) well was a vertical exploration well drilled in the mid-southern part of Block 106 in Song Hong Basin, offshore Hanoi, North Vietnam. The well is located approximately 100 km southeast of Hai Phong Port, in a water depth of 28m. The well was spudded on the 17 Sept. 2004 by jack-up rig Trident 17. 

The well successfully achieved the objectives and penetrated the secondary targets of stratigraphic traps Middle Miocene U210 and Early Miocene U240 and the primary target, the Pre-Tertiary Carbonate basement high. The Eocene-Oligocene intervals were absent (pinched out) at we'll location. The well reached final total depth of 1932.8 m-ssTVD, about 257 mTVD inside carbonate basement. The actual depth was 267.2m shallower than planned PTD at 2200 m-ssTVD. 

About 2.9 meters net oil sand was encountered in Middle Miocene U210-A sand with average porosity 18, average water saturation 57 and mobility of 49.9 mD/cp. The MDT sample and PVT analysis confirmed that U210-A sand contains saturated light oil of 42,9° API, GOR 453 scf/stb, low pour point (4.5°C), low sulfur and wax content. The top oil at 1282 m-ss was too close to the established oil-water contact at 1286.7 m-ss, therefore it was decided not to carry out a DST in the Middle Miocene U210-A sand.

Pre-Tertiary Carbonate basement is proven as a gas-bearing reservoir. The drilling encountered total losses when this carbonate interval was penetrated at 1677 m-ss and the drilling continued until TD by using the flooding annular system.   An open hole DST#1 was carried out in carbonate basement; unfortunately it was terminated early due to severe H2S to surface during nitrogen (N2) lifting. However, the fluid sample analysis taken from the choke manifold confirmed the presence of gases in this karstified carbonate basement. 

Beside the two proven oil and gas-bearings zones mentioned above, another two Speculative Resource (SR) reservoirs (Mid Miocene U210-B and Early Miocene U240-A) were identified with up-side potential based on their reservoir characteristics, total gas ratios, oil shows and stratigraphic traps identification.  

Based on these findings, the estimated gas and oil in-place are as follows:

Pre-Tertiary Carbonate basement is proven as a gas-bearing reservoir. The drilling encountered total losses when this carbonate interval was penetrated at 1677 m-ss and the drilling continued until TD by using the flooding annular system.   An open hole DST#1 was carried out in carbonate basement; unfortunately it was terminated early due to severe H2S to surface during nitrogen (N2) lifting. However, the fluid sample analysis taken from the choke manifold confirmed the presence of gases in this karstified carbonate basement. 

Beside the two proven oil and gas-bearings zones mentioned above, another two Speculative Resource (SR) reservoirs (Mid Miocene U210-B and Early Miocene U240-A) were identified with up-side potential based on their reservoir characteristics, total gas ratios, oil shows and stratigraphic traps identification.  

Based on these findings, the estimated gas and oil in-place are as follows:

              Potential Resource

Mid Miocene U210-A: 24.23 Mmstb (prove + prob) and 6.51 Bscf (poss)

Carbonate Basement: 1232 Bscf (prove + prob) and 471 Mmstb (poss)

              Potential Resource

Mid Miocene U210-B: 50.2 Mmstb (EV) and 24.97 Bscf (EV)

Low Miocene U240-A: 49.84 Mmstb (EV) and 55.44 Bscf (EV)

The probability of success (POS) is 0.85 and 0.26 for U210-B and U240-A respectively.

Yen Tu-1X well was plugged and abandoned on 7 October 2004 as a first offshore oil discovery in Song Hong Basin, northern Vietnam.  

2. HALONG-1X WELL 

In June 2006 PCOSB drilled the second exploration well (Ha Long -1X) in Block 106, to test the pre-Tertiary fractured karstified carbonate rock play and Miocene/Oligocene stratigraphic plays. The well was P&A with oil and gas shows in both objectives. 

  - Halong-1X was P&A with Oil & Gas Shows in Miocene and Pre-Tertiary Carbonate.

•      - Confirms working hydrocarbon system in Ha long structural complex from indication   of hydrocarbon presence in Miocene and Pre-Tertiary Carbonate, observed during drilling operation with gas reading up to 3.6% in Miocene & 1.8% in Carbonate and HC shows from cuttings.

3. THAIBINH-1X WELL 

The third exploration well (Thai Binh-1X) was drilled in September, 2006, based on the following considerations 

•         Thai Binh is the best remaining prospect after Ha Long and Yen Tu. This prospect is covered by 3D seismic, hence structural uncertainty is lower compared to the rest of remaining prospects in block 102 & 106. 

•         Sizable prospect structure. Maximum closure area is 40 sq. km. 

•         Less complication of structuration by faults. No fault cuts in the crestal part of the structure. 

•         Good sealing potential for the reservoirs. 

Date : 21st November 2006

THAI BINH DST# 1 MAX GAS FLOW 23 MM SCF/DAY  Programmed TD: 3200m TVDSS / 3230 +/- 300m MDDF  Primary objective: To explore the hydrocarbon potential of the Middle Miocene, Lower Miocene, and Oligocene  clastics within four-ways dip closure and fault dependent. Final Total depth: 2900 m MDDF Formation: U350  DST#1: Max. Flow Period at 128/64“ fixed choke: 23 MMscf/d.

THAI BINH DST # 2 MAX  FLOW 24 MSCF/D Programmed TD: 3200m TVDSS / 3230 +/- 300m MDDF Primary objective: To explore the hydrocarbon potential of the Middle Miocene, Lower Miocene, and Oligocene clastics within four-ways dip closure and fault dependent. Final Total depth: 2900 m MDDF/ 2895.7 m TVDDF Formation: U350  Remarks: DST#2: Max. Flow Period at 128/64" fixed choke: 24 MMscf/d

THAI BINH  PROSPECTIVE RESOURCES (PR) AND RECOVERY
THAI BINH GAS FIELD WORTH
RECOVERABLE FOR GAS

Total gas is 678.64 (for North) + 346.19 (for South) = 1,024.83 billion cubic feet or 1,024 

4. BACHLONG-1X WELL

 Bach Long 1X – Well drilled by our partner PIDC, estimated total gas is 500 billion cubic feet. Sixty percent (60%) of Bach Long prospect belongs to Blocks 102 & 106. 

5. POSITIVE CONDERATION FOR INVESTOR

As a result of 10 drilled wells and 3D and 2D seismic reports, blocks 102 &106 have estimated reserves of one billion barrels of Oil of excellent quality and 3 trillion cubic feet of natural gas. The expectations on Blocks 102 & 106 may increase the proven reserves. 

The term of the contract is for 25 years for oil and 30 years for gas production with an exploration period ending in February 2009. As a conclusion after 6 years of exploration the following statements resume today’s situation December of 2006.

Positive consideration for investor

•         Very attractive block with huge, low risk exploration and appraisal potential (high impact, potential company maker targets) Geological risks are minimized in remaining prospects & leads. 

•         Planned evaluation of commerciality of Miocene oil discovery and gas  and potential of other undrilled, mapped Miocene prospects around Yen Tu and Thai Binh.

•         Rapid commercialization of discoveries Year 2008 (for oil).