AUSSIE INDEPENDENT ABOUT TO SIGN VIET NAM PSC

Anzoil NL, West Perth, Australia, expects to sign soon a production sharing contract (PSC) covering a block in Viet Nam's Hanoi basin. The company recently completed negotiations of terms of a PSC covering 4,750 sq km of onshore and shallow offshore acreage in the Tertiary Hanoi basin of northern Viet Nam. ft includes Tien Hai gas field, productive from pay at 1,200 m. Shallow Tien Hai production is excluded from the PSC, but deeper pay and any incremental reserves in the productive zone at

July 12, 1993

4 min read

Anzoil NL, West Perth, Australia, expects to sign soon a production sharing contract (PSC) covering a block in Viet Nam's Hanoi basin.

The company recently completed negotiations of terms of a PSC covering 4,750 sq km of onshore and shallow offshore acreage in the Tertiary Hanoi basin of northern Viet Nam. ft includes Tien Hai gas field, productive from pay at 1,200 m. Shallow Tien Hai production is excluded from the PSC, but deeper pay and any incremental reserves in the productive zone at 1,200 m are included in the PSC.

Anzoil expects final approval of the PSC from Viet Nam's State Committee for Cooperation and Investment to occur soon. When that happens, Anzoil will hold an 80% interest in the PSC through a wholly owned Singapore subsidiary, Anzoil (Asia) Pte. Ltd.

EXPLORATION TARGET

Anzoil will explore mainly for oil on the PSC block, with deeper natural gas pay a secondary target.

It estimates prospects could hold reserves of 20-100 million bbl of oil or 200 bcf to 14 tcf of gas.

During the first year of the PSC, Anzoil plans to conduct a regional basin study and reprocess 2,400 line km of seismic data. At the same time, Anzoil plans to reenter and test the 3,245 m depth Well 84 on the block. Although it expects the recompletion to produce gas instead of oil, the gas composition and pressure will bracket extent of potential oil reserves in the 30 sq km Tien Hai structure.

Total outlay projected for the first year of the PSC is $5.3 million, including signature bonus to state owned petroleum company Petrovietnam and costs incurred to date.

During the PSC's second and third years, respectively, Anzoil plans detailed seismic surveys of the block and two wells targeting the best oil prospects.

AREA GEOLOGY

The Hanoi basin, on trend with Tertiary sediments in southern Viet Nam, Malaysia, Indonesia, and China, extends into the Gulf of Tonkin, where an ARCO group found Yacheng 13-1 gas field off China's Hainan Island.

In addition, Total found 103T-H gas/condensate field just off Anzoil's block, and a string of oil and gas fields was discovered in the Weizhou area of the Beibu Wan basin east of the Hanoi basin.

Three wells on the Tien Hai structure show it is analogous to Malay basin structures in that the crest of the structure is gas bearing at a depth below the excluded shallow gas zone, Anzoil said.

The company evaluated Well 84 logs and concluded a gross 210 m of probable gas pay was not tested by Soviet Union agencies exploring the area. The apparent gas sands lie between and above proven gas pays at 2,525 m and 3,180 m. An immediate exploration target is the potential for one or more oil legs on the flanks of the structure. Minor oil shows were reported in Wells 84 and 106.

Four other structural trends have been mapped on the block, and seismic data reveal other leads of different age and origin.

In addition to geologic potential, the Tien Hai block lends itself to early production because it is near Hanoi and Hai Phong. Both areas rely mainly on coal for fuel, and planned industrial expansion calls for increased use of oil and natural gas.

FINANCING, TERMS

Anzoil has placed a share offering to four institutional investors to raise $2.7 million, subject to the company signing a PSC within 60 days of June 29.

The company expects to raise more capital next year to fund exploration, although it may consider a farmout on the PSC to one or more of the 26 petroleum companies that have shown an interest in the block.

Anzoil retains control of commerciality declarations. Petrovietnam has the option to participate in producing areas for a 15% working interest, repaying sunk costs from production.