Horizon confirms China oil discovery Alison Middleton Monday, 29...

Horizon confirms China oil discovery Alison Middleton Monday, 29 September 2014
THE value of Papua New Guinea-focused Horizon Oil is set to rise following the discovery of oil in the Beibu fields, offshore China. Horizon Oil CEO Brent Emmett. Drilling has been completed on the first of two exploration wells in the highly prized Beibu Gulf Block 22/12. In a statement to the market, Horizon said the exploration drilling program followed up on earlier exploration discoveries and the subsequent successful development of the WZ 6-12 and WZ 12-8W fields in 2012 and 2013, which have already produced over six million barrels of oil. The well is located 4.7km northeast of the WZ 12-8W platform and about 2.7km west of the WZ 12-8E discovery wells. Horizon confirmed the WZ 12-10-1 well had discovered oil in the top of the Jiaowei T42 formation over an interval of 5.5m, with high porosity net oil pay of 4.2m. The well was drilled to a total measured depth of 1406m where granite basement was intersected. No oil pay was interpreted in the deeper Weizhou formation. A sidetrack was drilled to a bottom hole location 340m east northeast of the first well to a total measured depth of 1265m to investigate the T42 reservoir updip, which confirmed oil in the top of the T42 formation with a thicker net oil pay of 5.5m. A wireline evaluation logging program, including MDT pressure measurements and formation fluid sampling, has been run, which confirmed the oil pay in the T42 reservoir. The discovery will now be evaluated to assess how it may be integrated into the Beibu project as rig HYSY 935 moves to the WZ 12-10-2 exploration location to drill the second and last well in the program. Horizon Oil CEO Brent Emmett said: “This oil discovery adds potentially valuable oil volume to the future WZ 12-8E development project, for which planning is well underway. “The discovery is timely and will allow the joint venture to evaluate alternatives for development of the WZ 12-8E oil field,” he added. Horizon Oil’s plans to create a leading Asian mid-cap exploration and production company through a merger with Roc Oil were thwarted when the $800 million merger fell through. But investors and analysts believe the company’s value could substantially increase as a result, Alison Middleton reports. Investors and analysts believe Horizon’s valuation will rise based on the cash price of $US450 million Chinese conglomerate Fosun International paid its off-market takeover of Roc Oil and related holdings held by both Horizon and Roc in the Beibu fields. Fosun valued the Beibu assets very highly, and while Roc’s share price is fully valued on the market, Horizon has been left in the public eye and undervalued despite adding a value of upwards of $US250 million thanks to the Fosun-Roc deal.