Roc Oil farms in to Malaysian PSC

Roc Oil Ltd. has farmed in to a production sharing contract (PSC) in three fields about 50m off Malaysia. The D35, D21 and J4 fields are 100% owned and operated by Malaysia’s Petronas Carigali, with Roc Oil holding 50% participating interest.

Roc Oil farmed in US$25 million plus a carry with the 50% interest of $80 million for the project spread over Phases 1 and 2. Petronas Carigali will continue as operator of the PSC, retaining responsibility for operations and maintenance of the facilities.

“The farm in is an excellent fit for our business and in line with our Asian development strategy, we expect the fields to become cornerstone development assets within our growing regional portfolio,” Roc Oil CEO, Alan Linn said. The fields, particularly D35, contain material in place of oil and gas volumes, and overall field recovery is expected to benefit significantly from the introduction of secondary amd tertiary recovery technologies. The fields provide a portfolio of immediately bookable reserves plus contigent and prospective resources, which combined materially, add to and extend the reserves and resources life of Roc.

The fields are in production with a combined daily oil rate of about 10,000bopd and gas sales of about 17MMscf/d gross working interest. Roc Oil’s economic interest of the 2P reserves from the fields is 8.7MMboe.

The farm-in agreement includes amendments to the existing PSC effective from 1 Jan 2014 until Dec 2034. The PSC terms are designed for field redevelopment and enhanced oil recovery (EOR) to commercially encourage progressive incremental oil development over the full life of the PSC.

About the project:

1. Phase 1 Redevelopment – commencing in early 2014 is designed to increase oil production rate and enhance the Fields production potential through a series of intervention activities and facility debottlenecking projects. The Phase 1 activities include an agreed work scope and are expected to contribute about 17. MMboe of 2P gross economic entitlement from 1 Jan Phase 1 has a minimum work commitment of $70million gross and an estimated total capital investment requirement of up to $250million gross, operating costs associated with Phase 1 are expected to be about $22/boe.
2. The Phase 2 EOR Project is expected to significantly expand the production and overall recovery potential from the Fields by accessing 2C Contingent Resources of 79.6MMboe gross economic entitlement reserves (Roc Oil net 50%: 39.8MMboe). The Phase 2 project is subject to a Field Development Plan (FDP) decision, following completion of a series of studies designed to prove the reservoirs’ responses to re-pressurization and tertiary recovery. Completion of the study work and the subsequent FDP approval process is planned during 2015. Phase 2 has a minimum work commitment of $50 million gross and full phase 2 redevelopment cost estimates will be refined during the study period

In addition, the project also offers exploration opportunities, initial assessment of the Best Estimated Prospective Risked Resources associated with these fields is about  12 MMboe and requires further evaluation, however, one well is already under consideration for drilling in 2015.

This decision follows Roc Oil’s recent announcement to exit the Baker Manta Gummy (BMG) fields in the Bass Strait. Read More: Roc Oil exits BMG