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Santa Fe gets South China Sea, Beibu tracts

Feb. 10, 1997

Where Santa Fe will explore off China [42715 bytes] Santa Fe Energy Resources Inc., Houston, signed production sharing contracts with China National Offshore Oil Corp. that cover blocks in the Pearl River Mouth and Beibu Gulf basins off southern China. Santa Fe holds 100% of the working interest in both blocks. It has committed to programs of seismic reprocessing, acquisition of more seismic, and drilling on each block. The blocks are in 130-400 ft of water.

Where Santa Fe will explore off China [42715 bytes]

Santa Fe Energy Resources Inc., Houston, signed production sharing contracts with China National Offshore Oil Corp. that cover blocks in the Pearl River Mouth and Beibu Gulf basins off southern China.

Santa Fe holds 100% of the working interest in both blocks. It has committed to programs of seismic reprocessing, acquisition of more seismic, and drilling on each block. The blocks are in 130-400 ft of water.

Block 15/34 covers about 800,000 acres about 50 miles south of Hong Kong. It adjoins Block 27/11, where Santa Fe Energy previously acquired a 40% interest in a production sharing contract operated by Kerr-McGee Corp. The two blocks give Santa Fe Energy interests in more than 1.5 million acres.

Several lead and prospect areas have been identified from existing seismic data, and more data acquisition will focus on the confirmation and selection of drillsites and identification of more drillable prospects.

Santa Fe's Pearl River Mouth basin blocks are closer to shore than existing oil production.

The Phillips Petroleum Co. group's Xijiang oil fields are 80 miles southeast of Hong Kong in 330 ft of water. Amoco Orient Petroleum Co.'s Liuhua oil field is 120 miles south-southeast of Hong Kong in 100 ft of water. The ACT Group's Huizhou oil fields are 100 miles southeast of Hong Kong in 360-380 ft of water.

Block 23/28 covers nearly 500,000 acres north of Hainan Island. Geology is similar to that in the northern Beibu Gulf basin, where multiple discoveries have been made and Cnooc has four oil fields producing.

The area is also geologically similar to the Pearl River Mouth basin and resembles parts of western Indonesia where Santa Fe has been successful recently.

Several attractive pros- pects have been identified from existing data that will be supplemented with 2D and 3D seismic programs for final prospect delineation and drillsite selection. Santa Fe Energy plans to open a China office and start seismic surveys by midyear.