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Gold/Mining/Energy : Sodra Petroleum -- Ignore unavailable to you. Want to Upgrade?

To: Greywolf who wrote (21)	6/9/1998 7:47:00 PM
From: Greywolf	Respond to of 133

And in a related story with some aspects as far as the widening interest in the area... The Falklands: Gulf Canada and Roc Oil Agree to Share Exploration Risk and Upside Potential, Offshore Falklands DENVER, COLORADO, June 8 /CNW-PRN/ - Gulf Canada Resources Limited (Gulf) and Roc Oil Company Limited (ROC) have entered into a Share Sale Agreement (the ''Agreement'') with regard to Gulf's interest in Tranches C & D, north of the Falkland Islands. The principal commercial terms of the Agreement may be summarized as follows: - The Agreement was signed on 21 May 1998 and is subject to the approval of the Governor of the Falklands Islands. - Gulf holds a 12.5 per cent interest in Tranches C and D through its wholly owned subsidiary Clyde Expro Limited. Gulf will transfer its entire interest in Tranches C and D to a wholly owned subsidiary, to be named Gulf-ROC Falklands Ltd., following which ROC will acquire 100 per cent of the outstanding shares of that company. - ROC, a Sydney-based privately funded oil exploration company, will reimburse Gulf for its net share of 1998 Joint Venture costs, meet all of the ongoing expenditure obligations that would otherwise be for Gulf's account and issue to Gulf 120,000 ROC shares at an issue price of US$22/share, reflecting the current market price of ROC shares based on independent third party transactions. ROC will also appoint a Gulf nominee to its Board of Directors. - ROC will also issue to Gulf up to 75,000 additional ROC shares, at US$22/share, depending upon the results of the 1998 drilling campaign in Tranches C and D and neighbouring areas. - If a commercial discovery is declared in either Tranche C or D, Gulf will have the option to reacquire 20 per cent of its original 12.5 per cent interest, or the economic equivalent thereof, by reimbursing 20 per cent of ROC's net expenditures plus interest. - The issuance of ROC shares to Gulf is subject to the approval of Australia's Foreign Investment Review Board. The North Falkland Graben lies approximately 200km north of the Falkland Islands and covers an area of about 7500 sq km/1.85 million acres (Attachment 1). The first well drilled in the region was spudded by Amerada Hess in late April 1998 in Tranche A, approximately 1.5km north of the northern boundary of Tranche C. Neither Gulf nor ROC participated in the drilling of the Amerada well which reportedly encountered oil and gas shows in non-commercial quantities prior to being plugged and abandoned in late May 1998. The first well on the Minke prospect in Tranche C, which is subject to the Agreement, is scheduled to spud in early June 1998 and is projected to reach a Total Depth of about 1900m.

To: Greywolf who wrote (21)	6/9/1998 7:49:00 PM
From: Greywolf	Respond to of 133

LASMO BEGIN DRILLING ON TUESDAY (A Report for FIBS by Hermina Campbell 02 June 1998) The Borgny Dolphin has been moving to Tranche "C" and on Tuesday was positioning itself ready for Lasmo to begin drilling their first well in the North Falklands Basin. Although minor, the trace of oil found by Amerada Hess, it was still unexpected and sooner than expected. In charge of operations in the Falklands from Lasmo is Tim Bushell. Speaking to him in London on Monday, I asked what Lasmo's reactions were to Amerada Hess's find and how it effected tham. TB First of all the fact that they had some oil shows is encouraging. Quite a lot has been printed in the press about that. It is encouraging because, as Lasmo saw it, there may not be an oil source rock there and the fact that there are some oil shows there does indicate that somewhere in the region there is an oil source rock working but, on the other hand, we have to be extremely cautious with that information because there is a lot more we have to do to establish whether there is any kind of commercial oil there and I think perhaps people got a little bit excited over the last few weeks because they didn't understand that link and really the big difference between just having oil shows and having oil that can be produced in commercial quantities. In fact, the results from Amerada were encouraging and, in a way, helped us choose where we are going to drill. HC How then does that information help you decide where you will drill? In laymans terms, how is it giving you a better indication of where to put the oil rig? TB Because in drilling in the Falklands we had no well data at all, we had to make assumptions and guesses, if you like, about what we could see on the seismic there. We always knew there would be some surprises about exactly the details of the geology and obviously the Amerada well has given us some understanding. I am sure there's a lot more that we will find out and there will be more surprises but it has given us some information about what level we may expect to find actual reservoirs which would hold the oil. and that's probably one of the key things that has come out of their well is information about that and the fact that there are oil shows and there is an oil source rock working, so that, in a way, guided us to where we are going to drill. Obviously it's created a number of options as well, where we coudl drill in the future but, at the moment, it did help in selecting this well. It's hard to explain it in any more detail than that, really. HC Are there any disadvantages in being the first or second company to drill? TB There are always disadvantages in drilling early on. The more information you get the better. By the time the fourth company comes to drill, which I think it IPC, they are going to benefit quite a lot from knowing the data and information that have come out of the first three wells. Someone had to go first and during the negotiations when we first created the FOSA group, we came up with an order and that's just how it is, really. HC Amerada Hess completed their drill before they expected. Are you able to indicate whether it's likely to be quicker than expected? How much time is it going to take for this next well do you think? TB It is very difficult before you have drilled a well to tell just exactly how long it's going to take to complete the well and I think we were all conservative when we were talking about the amount of days it would take. Amerada did it quite a bit quicker. I suspect that we will do the same thing but there are always problems or uncertain conditions that you can run into but we would hopely complete operations within a month or so. HC Finally,, then, Desire, obviously in comparason to Amerada Hess is very small and their shares have been affected quite a lot. Havbe shares within Lasmo been affected by this find and the fact that the well has been abandoned? TB Not really. I think our share price moved up a little bit during the time when Desire's share price was going up the most but it is only the fact that the whole of Desire's investment is directly related to the Falklands therefore any success down there reflects into their share price whereas Lasmo, an International oil company have interests all over the world and really, success in the Falklands while exciting for Lasmo's share holders would, in fact, realise it was early days. I think that probably one of the issues was there was quite a lot of speculation about what was happening there and what the implications were of those oil shows and I think people got too excited about those results. While they were encouraging, I think they were slightly mis-understood. Obviously Lasmo has a different set of shareholders. HC so, general advice to everybody is sit tight and wait and see. TB Yes. It could take six or seven wells before something is proven. The geology of the area may well be more complicated than what people thought and we are not able to predict with the seismic exactly what is under the earth and you need to drill wells and that really is the fundamental part of the oil exploration business. We will see ups and downs along the way regarding news coming out of the various wells that are being drilled down there.