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RH Petrogas spuds first of 15 development wells in the Fuyu 1 Block onshore China

17th November 2014

RH Petrogas has commenced the drilling of its first development well at Fuyu 1 Block, Jilin Province, China

RH Petrogas spuds first of 15 development wells in the Fuyu 1 Block onshore China
Upon the completion of drilling, the wells will be suspended in readiness to move into production in 2015 when the upcoming winter season ends

The drilling of the first development well commenced on 17 November 2014 and it is expected that up to 15 of such wells will be drilled and completed before the end of 2014. 

“I am very proud of our China team’s successful effort to begin drilling the first development well after obtaining ODP approval just one month earlier,” said Francis Chang, chief executive officer of RH Petrogas.

“The pre-development preparation since early 2013 has made this possible. These wells will start contributing to the group’s production in 2015. The crude sales contract that was signed with CNPC provides a secure market for the oil produced.”

On 16 October 2014, the group announced that the Overall Development Plan (ODP) for the phased development of the Yongping Oilfield in Fuyu 1 Block had been approved by the National Development and Reform Commission of the People’s Republic of China.

This approved ODP entails the drilling of up to 1,008 wells over a five year period. The wells are expected to be drilled to a depth of around 200 to 300 metres due to the shallow reservoir.

Upon the completion of drilling, the wells will be suspended in readiness to move into production in 2015 when the upcoming winter season ends.

The Yongping Oilfield produces low sulphur heavy crude oil with 18.50 API.

 In order for the oil to flow to the surface, thermal recovery using steam injection (Huff and Puff) is required for each well, which will be followed by steam flooding of the field. This thermal recovery method is a mature technology used in the oil and gas industry and the group has employed the technology with good results in the pilot test area within the field in the last few years.

Moving forward, the group will continue to process and interpret a new 3D seismic data for future exploration and appraisal programs in the Fuyu 1 Block to further assess its resource potential.

Fuyu 1 Block is located in Songliao Basin, Jilin Province, the People’s Republic of China and is operated by Kingworld Resources Limited, a wholly owned subsidiary of the RH Petrogas.

KRL entered into the petroleum contract for Fuyu 1 Block with China National Petroleum Corporation (CNPC) in November 2007.

KRL has a 100% working interest in the Fuyu 1 Block during the evaluation phase.

Upon the commencement of commercial production under the Fuyu 1 PSC, CNPC would back in for a 51 per cent working interest.

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