Oil and gas group SOCO International (LON:SIA) confirmed this morning that it had agreed contracts for all of the rigs it is going to need as part of a major exploration and appraisal programme in Southeast Asia and Africa this year. The news was included in an update by SOCO for the period from January 1, 2010 to May 17, 2010, in which it also noted that it was on course to deliver first oil from its Te Giac Trang licence in Vietnam in mid-2011. Production from the first phase of that development is expected to be approximately 50,000 barrels of oil per day.
SOCO’s 2010 exploration programme promises an effort to de-risk around 600 million barrels of potential net recoverable reserves. The next target on the programme will be a drilling campaign in the Cuu Long Basin offshore Vietnam to appraise and prove up significant additional reserves along with two to four high impact exploration wells on the Nganzi Block onshore the Democratic Republic of Congo (Kinshasa).
The first of those wells will be the TGD-2X well in Vietnam, which is expected to spud in early June and is being drilled on a sole risk basis. This well is targeting reserves (P50) of around 100 million barrels in the supravolcanics interval that was briefly tested in SOCO’s discovery well, TGD-1X-ST1. In Kinshasa, SOCO has agreed a contract for two firm and two contingent wells on the 85%-held Nganzi Block. The first well on Prospect “B” is set to spud in July and will target around 200 million barrels of recoverable reserves. The company is understood to have discussed farm-out options with a few select participants, but has made no commitment as yet.
Meanwhile, the company has issued tenders for a number of long lead items needed for its Te Giac Trang development. Conversion of the floating production, storage and offloading vessel is underway in Singapore. Fabrication is ongoing on the initial unmanned platform to be installed in the third quarter of this year on the northernmost H1 fault block. Drilling of the initial development/appraisal wells will be conducted from this platform and begin shortly after installation of the platform.
Elsewhere, SOCO said production had been disrupted by mechanical problems at Ca Ngu Vang (CNV) in Vietnam. As a result, CNV production net to SOCO averaged 1,996 barrels of oil equivalent per day during the first four months of the year. That figure was down from a daily average of 2,848 boepd during 2009.
SOCO raised £102m in January and said it continued to hold around $260m (£180m) of cash on its balance sheet. Shares in the company were down by 1.5% to 1679p.