*Note: MMbbls = million barrels of recoverable oil; assumes all
oil with no gas fill in mapped closure
GROSS PROSPECTIVE RESOURCES NET ATTRIBUTABLE PROSPECTIVE
- GAS RESOURCES TO UMC ENERGY
All values in Bcf*
Low Best High Low Best High Chance
Estimate Estimate Estimate Estimate Estimate Estimate of Success
LICENCE LEAD P90 P50 P10 P90 P50 P10 (%)
----------- ----------- ------------- ----------- ----------- --------------
Lead
A 559 1522 3286 168 457 986 2
-------------------- ----------- ----------- ------------- ----------- ----------- -------------- ------------
Lead
B/B1 1048 2704 5603 314 811 1689 2.2
-------------------- ----------- ----------- ------------- ----------- ----------- -------------- ------------
Lead
C/C1 65 180 397 20 54 119 0.6
-------------------- ----------- ----------- ------------- ----------- ----------- -------------- ------------
Lead
PPL374 D 399 1189 2762 120 357 829 2.8
-------- ----------- ----------- ------------- ----------- ----------- -------------- ------------
Lead
E 93 227 464 28 68 139 1.5
-------------------- ----------- ----------- ------------- ----------- ----------- -------------- ------------
Lead
F 136 339 701 41 102 210 1.4
-------------------- ----------- ----------- ------------- ----------- ----------- -------------- ------------
Lead
G 57 144 299 17 43 90 2.1
-------------------- ----------- ----------- ------------- ----------- ----------- -------------- ------------
Lead
PPL375 H 97 368 894 29 110 268 5
-------- ----------- ----------- ------------- ----------- ----------- -------------- ------------
Grand P50 Total
Gas 6,673 2,002
----------- ----------- ------------- ----------- ----------- -------------- ------------
*Note: Bcf = billion standard cubic feet of recoverable gas;
assumes all gas with no oil fill in mapped closure
Exploration activities
During 2013, CNOOC continued its technical work and exploration
activities across the four PNG licences. CNOOC completed technical
work to meet minimum work obligations in three of the four
licenses, PPLs 378, 374 and 375. However, due to delays in
collecting critical well and seismic data in PPL 405, the work
program in this licence, which required the drilling of one
exploration well, was not completed by 8 May 2014, the end of the
first two year licence term. A significant amount of existing data
had been received late in the year while other important data has
not yet been received. This has seriously delayed the technical
evaluation of PPL 405 and progress was less than anticipated. It is
anticipated that the PNG Government will be approached by CNOOC as
the Operator seeking a variation in work program commitments for
this licence.
PPL 378 comprises two blocks (East and West) situated onshore in
the Papuan fold Belt. The western block is particularly well
located with respect to existing oil and gas fields production
facilities and infrastructure at Moran. The recently completed
pipeline that will transport gas from Hides to ExxonMobil's Port
Moresby LNG plant transgresses PPL 378 West.
The licence contains the Paua-1x oil discovery drilled by BP in
1996. Oil was recovered from RFT wireline tests form two sandstone
reservoir sequences in the Iagifu Formation. Some 37m of net oil
pay is interpreted in 5 layers in separate Upper and Lower Iagifu
reservoirs. The Toro Formation is water-bearing although the
wireline log evaluation suggests the presence of residual
hydrocarbon saturation.
New PSTM and PSDM reprocessing of existing 2D seismic data using
new velocity modelling across the Paua and Moran structures was
completed during the year. Despite the difficulties in processing
seismic in the PNG Highlands, the final results suggest that this
modern reprocessing produced cleaner sections with significant
reduction in noise and multiples originating from the shallow
section.
Initial interpretation and mapping by CNOOC supported by
structural balance restoration, indicates significant structural
closure up-dip from Paua-1x to the NE. The structural high is
co-incident with the surface anticline defined by surface geology
and topography. The mapping supports volumetric oil and gas
estimates made by 3D-GEO and suggests that Paua is a robust
structure of a sufficient size and commercial potential to warrant
appraisal drilling.
A preliminary well location on the back-limb of the Paua
structure up-dip of Paua-1x has been identified and a preliminary
well design has been formulated.
BGP PNG Exploration's 2D seismic acquisition vessel, the Dong
Fang Kan Tan No. 1 successfully completed the 2D acquisition
project over the two offshore licences, PPLs 374 and 375, on 3
January 2014. A total of 3,015 line kilometres of 2D seismic data
was acquired over 26 days without incident and ahead of schedule.
Seismic data quality was described as very good. Processing of the
2D data is currently underway by CNOOC with interpretation and
mapping expected to be completed during 2014.
Madagascar Madagascar continues to experience a period of
political upheaval and uncertainty. Despite the fact that the
Company has not, in any way, been negatively affected by these
events, it has resolved to take a cautious approach to exploration
and accordingly has not conducted exploration activities during the
2013 financial year. The Company continues to monitor the
situation. Given these circumstances, the Directors have resolved
that it is appropriate to recognise an impairment adjustment of
$nil (31 December 2012: $3,050,548) against the carrying value of
the intangible asset.
Financing The Company remains dependent on loan funds being made
available to it by Natasa Mining Ltd to meet its working capital
and other requirements.
Corporate During the year, the Company redomiciled from the
United Kingdom to the Cayman Islands following shareholders'
approval on 29 August 2013 and Court confirmation on 18 September
2013. The accounts presented are those of the newly incorporated
Cayman Islands company. However, in order to present a true and
fair comparison for shareholders the business has been treated as
continuing despite the change in legal entity, and the comparative
figures are those of the predecessor company domiciled in the
United Kingdom. Further details are given in Notes 1 and 28 to the
accounts.
Future developments
The directors anticipate the Company's major future developments
will revolve around further investment in and development of the
Papua New Guinea petroleum and Morondava uranium projects.
Principal risks and Uncertainties facing the Group
The principal risks faced by the Company and Group are as
follows:
-- The ability to raise sufficient funds to pursue the exploration of its exploration permits.
-- The exploration licences are located in remote parts of Papua
New Guinea and Madagascar where power and communications
infrastructure is rudimentary.
-- The operations of the Group are in foreign jurisdictions
where there may be a number of associated risks over which it will
have no control. These may include economic, social or political
instability or change, terrorism, hyperinflation, currency
non-convertibility or instability, changes of laws affecting
foreign ownership, government participation, taxation, working
conditions, rates of exchange, exchange control, and exploration
licensing.
-- Papua New Guinea and Madagascar may have less developed legal
systems than more established economies.
-- The exploration licences may be subject to conditions which,
if not satisfied, may lead to the revocation of such licences.
-- The exploration for and development of mineral and petroleum
deposits involves significant risks, which even a combination of
careful evaluation, experience and knowledge may not eliminate. Few
properties, which are explored, are ultimately developed into
producing mines/fields. There can be no guarantee that the
estimates of quantities and grades of minerals or petroleum
disclosed will be available to extract. With all mining/extraction
operations there is uncertainty and, therefore, risk associated
with operating parameters and costs resulting from the scaling up
of extraction methods tested in pilot conditions. Mineral/petroleum
exploration is speculative in nature and there can be no assurance
that any mineralisation/ reservoir will be discovered or if
discovered that it will prove to be economic.
Results and dividends
The loss for the year on ordinary activities before and after
tax amounted to $2,594,252 (31 December 2012: $6,482,013). The
directors do not recommend the payment of a dividend.
Share capital
Details of the share capital are given in note 19 to the
financial statements.
Events since the balance sheet date
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