TIDMRMP
RNS Number : 3605N
Red Emperor Resources NL
17 January 2019
17 January 2019
Red Emperor Resources NL
ALASKA UPDATE:
PERMIT TO DRILL APPROVED
The Board of Red Emperor Resources NL (ASX/AIM: RMP) ("RMP",
"Red Emperor" or the "Company"), is pleased to provide a further
operational update with respect to preparations for the drilling of
the Winx-1 exploration well, located on the Western Blocks, North
Slope of Alaska.
Highlights
-- Permit to Drill Approved for Winx-1 exploration well
-- Ice-road and infrastructure construction progressing as planned
-- Spud of the Winx-1 exploration well on schedule for mid-late February 2019
RMP is pleased to announce that the Permit to Drill the Winx-1
exploration well was approved by the Alaska Oil and Gas
Conservation Commission (AOGCC) on the 16(th) January. This key
permit was issued without comment and paves the way for rig
mobilisation in early February with spudding to occur on schedule
mid-late February.
Construction of the approximately 11-mile (18 kilometre) ice
road required for mobilisation of the drill rig is almost 50%
complete, with construction of the ice pad, from which the Nordic
Rig#3 will drill the Winx-1 well, to follow.
http://www.rns-pdf.londonstockexchange.com/rns/3605N_1-2019-1-17.pdf
Figure 1 - Ice road construction in preparation for mobilisation
of Nordic Rig # 3 in February
The Winx prospect is a 3D seismic defined conventional oil
prospect in the successful Nanushuk play fairway with a gross mean
unrisked prospective resource of 400 million barrels ("MMbbls")
(126MMbbls net to Red Emperor) and is adjacent to the Horseshoe
1/1A discovery well drilled by the Armstrong/Repsol JV in 2017.
Refer to the Company's announcement of 25 June 2018 for further
details.
Cautionary Statement: The estimated quantities of petroleum that
may potentially be recovered by the application of a future
development project(s) relate to undiscovered accumulations. These
estimates have both an associated risk of discovery and a risk of
development. Further exploration, appraisal and evaluation is
required to determine the existence of a significant quantity of
potentially moveable hydrocarbons.
Oil Search's Pikka B well in Alaska encounters hydrocarbons in
the Nanushuk formation
It is also worth noting that the first exploration/appraisal
well of the season, Pikka-B, has today been reported to have
successfully encountered hydrocarbons in the Nanushuk formation
with Oil Search describing the results as "very encouraging". The
phenomenal exploration success rate in the Nanushuk continues with
this latest discovery and is extremely encouraging to RMP and its
partners as we quickly approach Winx-1 spud.
http://www.rns-pdf.londonstockexchange.com/rns/3605N_2-2019-1-17.pdf
Figure 2 - Winx-1 exploration well, Western Blocks, Pikka B
well, Alaska North Slope and Nanushuk Fairway
The primary objective of the Winx-1 exploration well is the
Nanushuk Topset play, targeting the Nanushuk 4 and 5 sands. As can
be seen in Figure 3, the Winx prospect has been identified using
the Nanuq South 3D which covers the third party 2017 Horseshoe
discovery plus a large swathe of the "Western Blocks". Similar
amplitude response is observed at the Winx prospect to that seen at
the successful Horseshoe well location, which is situated
approximately 4 miles (6 kilometres) to the west.
http://www.rns-pdf.londonstockexchange.com/rns/3605N_3-2019-1-17.pdf
Figure 3 - Winx-1 targeting multiple stacked prospects with
strong amplitude support
For further information, please visit
www.redemperorresources.com or contact:
Red Emperor Resources NL +61 8 9212 0102
Greg Bandy
Strand Hanson Limited (Nominated Adviser) +44 (0) 20 7409 3494
James Harris
Brandon Hill Capital (UK Broker) +44 (0) 203 463 5010
708 Capital Pty Ltd (Australian Broker) +61 (0) 2 9112 2500
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
About Red Emperor Resources NL
Red Emperor Resources NL is an Australian natural resource
exploration company listed on both the Australian Securities
Exchange (ASX: RMP) and the AIM Market (AIM: RMP). Red Emperor has
oil and gas interests on the Alaska North Slope and in South East
Asia.
Alaska
Red Emperor has entered into Definitive Agreements with its
consortium partners 88 Energy Limited and Otto Energy Limited that
will see the Company participate in the drilling of a highly
prospective Nanushuk oil trend exploration well on the Alaska North
Slope in early 2019. The drill target is immediately adjacent to
and a direct analogue of the third party Horseshoe-1/1A oil well
drilled in 2017. Horseshoe is part of the billion-barrel plus
Nanushuk oil play-fairway, one of the largest conventional oil
fields discovered in the US in more than 30 years.
Technical work on the Western Blocks has identified a gross best
estimate prospective resource volume of 400 MMbbls (126 MMbbls net
to RMP), and a geological chance of success of 25%-35%. The
estimated quantities of petroleum that may potentially be recovered
by the application of a future development project(s) relate to
undiscovered accumulations. These estimates have both an associated
risk of discovery and a risk of development. Further exploration,
appraisal and evaluation is required to determine the existence of
a significant quantity of potentially moveable hydrocarbons.
The relevant interests in the Western Blocks under the
commercial agreements (subject to standard regulatory approval by
the State of Alaska) are as follows:
Red Emperor - 31.5% 35% 26.25% 28%
=============================== ================== ================== ================== ================== ================
88 Energy
(Drilling Manager) - 36.0% 40% 30.00% 32%
=============================== ================== ================== ================== ================== ================
Otto Energy 10.8% 22.5% 25% 18.75% 20%
=============================== ================== ================== ================== ================== ================
Great Bear
Petroleum** 89.2% 10.0% - 8.33% 20%
=============================== ================== ================== ================== ================== ================
Alaskan State - - - 16.67%
=============================== ================== ================== ================== ================== ================
100.0% 100.0% 100.0% 100.0% 100%
=============================== ================== ================== ================== ================== ================
* Government royalty of 16.67%
** Currently Operator of record on leases
*** "After back-in" interests reflect position if Great Bear
exercises its option to acquire a further 10% working interest
Philippines
Red Emperor also holds an equity interest of 37.5% of Block
SC55, which is located in the southwest Palawan Basin. SC55 covers
an area of 9,880km(2) and was awarded to Otto Energy Investments
Ltd (formerly NorAsian Energy Ltd) in 2005. It is a deep-water
block in the middle of a proven regional oil and gas fairway that
extends from the productive offshore Borneo region in the southwest
to the offshore Philippine production assets northwest of
Palawan.
Red Emperor participated in a USD25m exploration well
(Hawkeye-1) within the block in 2015 and contributed in excess of
AUD5m towards drilling costs. Over USD50m has been spent exploring
SC55 to date and a number of drill-ready targets remain, including
the "Cinco" gas prospect which has a best estimate prospective
resource of 1.6 trillion cubic feet ("tcf") recoverable gas.
Prospective Resources Reporting Notes
The Company announced the prospective resources estimate for the
Western Blocks in its announcement titled "Red Emperor to acquire
interest in large oil prospect in prolific Alaska North Slope" made
on 25 June 2018. The Company confirms that it is not aware of any
new information or data that materially affects the information
included in that announcement, and that all material assumptions
and technical parameters underpinning the estimates in that
announcement continue to apply and have not materially changed.
(i) The prospective resources information in this announcement
is effective as at 30 April 2018. (ii) The prospective resources
information in this announcement has been estimated and is
classified in accordance with SPE PRMS (Society of Petroleum
Engineers Petroleum Resources Management System). (iii) The
prospective resources information in this announcement is reported
according to the Company's economic interest in each of the
resources and net of royalties. (iv) The prospective resources
information in this announcement has been estimated and prepared
using the deterministic method. (v) The prospective resources
information in this announcement has been estimated using a 6:1 BOE
conversion ratio for gas to oil; 6:1 conversion ratio is based on
an energy equivalency conversion method and does not represent
value equivalency. (vi) The prospective resources information in
this announcement has been estimated on the basis that products are
sold on the spot market with delivery at the sales point on the
production facilities. (vii) Prospective resources are reported on
a best estimate basis. (viii) For prospective resources, the
estimated quantities of petroleum that may potentially be recovered
by the
application of a future development project(s) relate to
undiscovered accumulations. These estimates have both an associated
risk of discovery and a risk of development. Further exploration,
appraisal and evaluation is required to determine the existence of
a significant quantity of potentially moveable hydrocarbons. (ix)
In respect to the prospective resources referred to in this
announcement, Red Emperor's working interest in the four leases
(ADL#s 391718, 391719, 319720 and 391721), totalling 22,711 acres
all of which are located on the North Slope, Alaska, USA will be
31.5% (as set out in the table above) upon completion of the
transaction. (x) The prospective resources have been estimated on
the following basis: the best estimate prospective recoverable
resource calculation was based on a consideration of offset well
information and seismic expression; a combination of volumetric
assessment and field analogues have been used to estimate the
prospective resources; exploration drilling will be required to
assess these resources. (xi) The chance of discovery is considered
moderate as the prospective resources are near developed and
undeveloped reserves and in a proven oil and gas producing
province. There is a risk that exploration will not result in
sufficient volumes of oil and/or gas for a commercial development.
(xii) Prospective resources are un-risked and have not been
adjusted for an associated chance of discovery and a chance of
development.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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