Husky Oil China Ltd., a wholly owned subsidiary of Husky Energy, has completed drilling and testing of the second appraisal well at the Liwan 3-1 field on Block 29/26, South China Sea.

The West Hercules deepwater drilling rig commenced drilling the Liwan 3-1-3 appraisal well in February 2009. The well was drilled and tested in a water depth of 1,450 meters on the Liwan gas discovery which was made in 2006 in the South China Sea. The appraisal well was drilled to a total vertical depth of 3,668 meters below sea level.

"The Liwan appraisal well results continue to be very encouraging and confirm our pre-drill geological projections," said Mr. Lau. “This second appraisal well tested natural gas at an equipment restricted rate of 55 million cubic feet (mmcf) per day with indications that future well deliverability could exceed 150 mmcf per day. The delineation program, together with the drilling of two exploration wells provides key information for the Liwan Development Project facilities design. First gas production target is scheduled to be in the 2012 / 2013 timeframe."

With the completion of the appraisal well, the West Hercules deepwater drilling rig is now preparing to spud a second exploration well in Block 29/26. The Block is located approximately 350 kilometers south east of Hong Kong.

Husky has been exploring offshore China since 2002. Husky signed the Production Sharing Agreement for Block 29/26 in August 2004. Block 29/26 is 2,974 square kilometres in area. Husky holds a 40% working interest in the production block at the Wenchang oil field and 100% working interest in five exploration blocks in the South China Sea and one exploration block in the East China Sea. CNOOC Limited has the right to participate in the development for up to 51% working interest.

Tags: Husky Oil China Ltd