Pan Pacific Petroleum says that Pan Pacific Petroleum (Vietnam) Pty Ltd ('PPPV') has received the necessary PetroVietnam and Vietnamese Government approvals to acquire a 5% interest in the Block 07/03 Production Sharing Contract from Premier Oil Vietnam South B.V. ('POVS'). Under the terms of the original farmout agreement with POVS, PPPV agreed to acquire a 15% equity in Block 07/03 by funding part of POVS's costs of the Cá Rong Ðo exploration well, CRD-1, subject to PetroVietnam and Vietnamese Government approvals.

Under the terms of the Petroleum Law in Vietnam and the Block 07/03 Production Sharing Contract, PetroVietnam exercised its right of pre-emption to the extent of 10% of the proposed 15% farmout interest.

Since receiving notice of PetroVietnam's pre-emption, PPPV has been required to contribute under the terms of the original farmout agreement with POVS at the level required to earn a 15% interest, pending approvals of the acquisition of a 5% interest by PPPV and a 10% interest by PetroVietnam Exploration Production Corporation Ltd.

Following the approvals referred to above, POVS will now refund to PPPV all sums contributed by PPPV in excess of those commensurate with the acquisition of a 5% interest.

Block 07/03 covers 4,915 km2 offshore Vietnam in the southern Nam Con Son Basin, and is considered very attractive exploration acreage; it is adjacent to Block12W which contains the Chim Sao and Dua Oil Fields.

The farmin exploration well Cá Rong Ðo, CRD-1, drilled in June 2009, was a discovery, and established approximately 90m net pay comprising both oil and gas within multiple stacked reservoir layers. Two of these reservoir zones were tested and flowed oil at a combined rate of 3,265 barrels of oil per day plus 8.1 million standard cubic feet of gas per day, through a 48/64' choke. No water was produced from either zone.

3D seismic was subsequently acquired over the CRD structure and surrounding area. Appraisal planning is currently ongoing, with the possibility of a well being drilled in Q4 2010-Q1 2011.

Tags: Pan Pacific Petroleum