SOCO International plc (“SOCO” or “the Company”)

SOCO is an international oil and gas exploration and production company, headquartered in London. The Company has exploration activities in Vietnam, Mongolia, Yemen, Thailand and North Korea with production operations in Yemen, Tunisia and Mongolia.

Upgrade of Mongolia Project After Completion of Successful 2001 Drilling Programme

SOCO announces the conclusion of its four well 2001 drilling programme in Mongolia. Successful drilling of the first two wells, the 19-13 and 19-14 wells, was previously announced in the Company’s 2001 Interim Report published in September. Subsequently both wells have been completed and fracture stimulated in the Tsagaantsav zone. Although only portions of the indicated productive intervals were perforated in each well and tests were restricted by pump capacity, the wells still tested at initial rates of approximately 350 barrels of oil per day. These two wells are expected to be put on production in November after resizing of downhole pumps and completion of production facilities construction.

The final two wells in the programme, the 21-3 and 21-4 wells, were drilled in Contract Area 21, approximately 100 kilometres northeast of the Contract Area 19 development. The 21-3 well, a rank wildcat test, was spudded 24 August and drilled to a depth of 2100 metres. The well did not encounter productive reservoir sands and was abandoned without testing on 5 September. The 21-4 well, spudded on 11 September, was a 400 metre offset to the SOTAMO 21-2 well drilled in May 1997. The 21-4 well drilled to a total depth of 2500 metres encountering a total of 75 metres of oil shows in a gross interval from 1667 metres to 2020 metres. The drilling rig was released on 29 September. The well is expected to be completed and tested during the latter half of October.

An independent analysis of the Tamtsag Basin was conducted earlier this year, based on data gathered prior to this year’s drilling results, by the Chinese National Petroleum Corporation Research Institute, the research arm of the parent company of both PetroChina and Sinopec, China’s largest publicly listed oil and gas companies, and attributed original oil in place in SOCO’s Tamtsag project to be approximately 1.5 billion barrels. Chinese recovery factors in analogous basins range around 30%. SOCO has commissioned an independent reservoir engineering firm to update its reserves in Block 19 as a result of the drilling successes of the past two years.

With the completion of this year’s drilling campaign, Huabei Oilfield Services, the Chinese company providing the drilling services to the Company in Mongolia and a subsidiary of Petro China, has exercised its right to obtain a working interest participation, which requires it to fund its pro rata share of future work progammes in SOCO’s Mongolia project. Through the reduced cost drilling programme, it has acquired a 10% working interest in Contract Areas 19, 21 and 22. SOCO retains an 85% interest in the Tamtsag Basin, with Petrovietnam, the state oil company of Vietnam, holding the remaining 5% participation.

Sales of crude oil to China National United Oil Corporation, although constrained by trucking capability, averaged 350 bbls per day during September. Trucking capacity will be expanded during October. The 19-13 and 19-14 wells are expected to be put on regular production in early November.

Ed Story, CEO and President of SOCO, said:

“The 2001 drilling campaign in Mongolia confirmed the value of 3D seismic and repeated the 75% wildcat success rate of the previous year. With the drilling success of a Chinese company just across the border from our project in the Tamtsag Basin coupled with our success, we expect interest in the project to grow significantly. ”

Enquiries:

SOCO International plc
Tel: 020 7399 3300
Ed Story, Chief Executive
Roger Cagle, Chief Financial Officer

College Hill
Tel: 020 7457 2020
James Henderson
Peter Rigby
 
 
 
 
 
 
 
 

SOCO is aware of attempts to impersonate the company on social media. SOCO does not have a Facebook page.