GEOLOGY BLOCKS 102 & 106

On the basis of geochemistry tests and other reported results, source rock potential for hydrocarbon generation in the vicinity of wells 102-HD-1X, 102-CQ-1X and 103-TH-1X can be summarized as follows:

Source rocks are mature below 2000m corresponding to the lower part of the Miocene formation and an oil window would be reached at approximately 3000m at upper region of Block 106. Kerogen is generally type III and a gas prone type related to its depositional environment and supplies at lower region of Block 106. Hydrocarbon characteristics, Carbon isotope and biomarker studies were also conducted by Idemitsu for wells 102-HD-1X and 102-CQ-1X. The test results confirmed the following:

The oil shows of waxy crude oil detected from sidewall core from 1716m to 2030m are assigned to the same oil family. Strong shows in 120m-1500m indicate the presence of gas migration through formations.

Main kitchens for hydrocarbon generation and expulsion from lower Miocene coals are situated in central grabens. From a structural timing standpoint, hydrocarbon could only be expelled after 5.5 – 6 Ma, which corresponds to the base of the Pliocene unconformity.

The Upper Oligocene claystone reaches the level of oil cracking zone (generating gas) in the central grabens. Therefore, for prospects near the central grabens, sufficient maturity for gas would be expected. However, the potential of source rocks of upper Oligocene is good.

High potential source rocks are expected in Lower Miocene, Oligocene and Eocene in the deeper area in Block 106.