Fletcher Challenge Energy Completes Drilling

Fletcher Challenge Energy Completes Brunei Drilling Campaign

20 July 2000, Auckland – Fletcher Challenge Energy has completed the third well of its current Brunei exploration drilling campaign. It advised the New Zealand Stock Exchange today that the East Egret –1 well was plugged and abandoned at a total depth of 4289 metres after failing to encounter significant quantities of hydrocarbons.

With its joint venture partners, Fletcher Challenge Energy decided that it was prudent to curtail the exploration programme to enable learning from the three well programme to be reviewed and integrated before proceeding with further exploration investment in Brunei.

Although the results of this phase of the exploration programme were disappointing, significant geological information has been gained that is relevant to the remaining inventory of more than 30 prospects and leads that the company is committed to evaluating.

“This ability to drill low cost exploration wells in Brunei has improved the economics of future exploration in Brunei. Additionally, given the location and nature of the prospects drilled in this campaign, the information gained will provide valuable insights into the prospectivity of the deepwater exploration acreage that is shortly to be opened to industry participation,” said Dr Lloyd Taylor, Chief Operating Officer, Fletcher Challenge Energy.

The total cost of the three-well campaign was US$17m, reflecting operational drilling performance that was exceptional by industry standards. As a consequence of the farm down to Unocal the net cost of the programme to Fletcher Challenge Energy was US$2.7 million.

Fletcher Challenge Energy’s next planned exploration activity is adjacent to the Maharaja Lela field in the Elf-operated Block B. It has identified a number of attractive prospects and, subject to a commercial understanding on gas offtake, two prospects were planned for drilling in 2001.

“While this is disappointing, failure in a limited number of exploration wells is a likely outcome and this supports the portfolio approach to exploration,” said Dr Taylor.

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For more information contact:
Stephen Jones
Communications Director
Fletcher Challenge Energy
Tel: 64 9 525 9230 or 021 629 535
Further information on Fletcher Challenge Energy can be viewed at our Web site, at www.fce.co.nz

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