Second well spudded in Brunei drilling campaign

BRUNEI, Thursday 18 May 2000 – Fletcher Challenge Energy will today spud the second exploration well in what is the biggest offshore exploration drilling programme in Brunei for a decade.

“The Laksamana Utara (LKU-1) well is testing a relatively unexplored play type which has long offered much promise. The LKU-1 well will be an important test of this geological model and its hydrocarbon potential,” Greig Gailey Fletcher Challenge Energy Chief Executive said.

Laksamana Utara is located in Block CD and will evaluate various targets within the depth interval of 1800 metres to 3500 metres. The geological model suggests that if the primary target reservoirs are hydrocarbon bearing, then condensate rich gas is more likely than oil. The secondary target reservoirs are however more likely to be oil bearing. Gas market developments in the region are such that a sizeable gas condensate discovery could be brought on stream within five years.

While reserve estimates have a wide range, Fletcher Challenge Energy’s share of mean potential reserves is thought to be approximately 23 million barrels of oil equivalent, with other prospective un-drilled structures in the vicinity. Consistent with the wildcat nature of the well, Fletcher Challenge Energy has assessed the probability of commercial success for LKU-1 at approximately 15 per cent.

Drilling Laksamana Utara is expected to take 35 days to reach total depth.

Fletcher Challenge Energy has a 26.95 per cent share and is the operator. Unocal has a further 26.95 per cent share with the remainder owned by Brunei partners.

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