Projects

Block 22/12, Beibu Gulf, China

Horizon Net Working Interest (Production License) – 26.95%

Asset Overview

  • Block 22/12, Beibu Gulf, China, 26.95%
  • JV: CNOOC (51% – Block 22/12 Operator), Roc Oil (19.6%), Oil Australia Pty. Ltd. (2.45%)
  • Block 22/12 generates approximately 65% of Horizon operating cashflow
  • Low cash operating costs less than $20/bbl produced for the half year
  • WZ6-12 and WZ12-8W field abandonment costs prepaid into a sinking fund, WZ12-8E field abandonment costs to be paid from production

Recent Highlights

29 January 2024

  • Block 22/12 production declined naturally as anticipated across all the main producing fields, with H1 FY24 average of over 10,400 bopd gross (~2,800 bopd net)
  • A three-well workover campaign was successfully concluded subsequent to the end of HY24, comprising activities to restore production from two inactive wells and preparatory work on a third inactive well to enable side-tracking during the proposed 3-4 well drilling program prior to financial year end
  • JV is continuously identifying and evaluating infill well and infrastructure led appraisal opportunities which aim to support material reserves replacement over the longer term, including further infill wells and liquid handling capacity upgrade initiatives across the project area

Background

Block 22/12 oil development comprises nine hydrocarbon pools across three different Production Licenses.  It lies 35km southwest of Weizhou Island, China, in 30m water depth.

The initial development included production from the WZ6-12 (ten production wells) and WZ12-8W (five production wells) fields through two unmanned wellhead platforms, via a three-phase flow via insulated pipeline to the new processing, utility and quarters “B” platform (PUQB) adjacent to CNOOC’s WZ12-1 production and pipeline hub.  Oil, gas and water is separated on the PUQB and the oil exported to shore via CNOOC production and pipeline facilities.

The oil is stored at facilities on Weizhou Island prior to transport to market and the gas utilised, as required, by the Weizhou terminal facilities.  Waste-water is reinjected into existing water injection wells, ensuring zero waste water discharge to environment during normal operations.

WZ6-12 & 12-8 project FID was taken in 2011 on the basis of 16.2 million barrels of estimated gross 2P reserves (Horizon net 4.4 million barrels) and an expected 10-year field life, and production began in March 2013 from two wells in the 6-12 field.  Phase 1 development drilling was completed on August 2013.  Reserves increased by 18% with three successful appraisal wells drilled during the same period.

Between 2014 and 2022, reserves and resources were substantially added to through a number of well interventions, and the following drilling activities:

 

  • Two exploration wells in 2014 (WZ12-10-1 & WZ12-10-2)
  • One development well in 2015 (WZ12-8W A6H)
  • Two development wells in 2018 (WZ12-8W A7H and A8H)
  • One appraisal well in 2019 (WZ6-12M1)
  • Two development wells in 2020/21 (WZ6-12 A11 and A3S2)
  • Two development wells in 2022 (WZ6-12-A12S1 and A10S1)

New WZ12-8E development project first oil in 2022:  The WZ12-8E project consists of 11 horizontal producers drilled into three separate fields plus a water disposal well.  First oil was achieved in April 2022 only 17 months after FID.  The first and second phases of development were completed in January 2023 with WA12-8E project production reaching a peak of 12,600 bopd gross (Horizon net 3,400 bopd) in August 2022.  The joint venture is actively investigating further development of the WZ12-8E fields.

Reserves and Resources as at 30 June 2023

Proved and Proved + Probable Reserves (Horizon net)

China Block 22/12
1P Total Liquids MMbbl
2P Total Liquids MMbbl
Developed: WZ6-12S,M,N; WZ12-8W,M,E
1.8
2.8
Closing Balance 30 June 2023 (arithmetic summation)
1.8
2.8

Contingent Resources (Horizon net)

China Block 22/12
2C Total Liquids MMbbl
2P Raw Gas Bcf
2C Sales Gas PJ
WZ6-12S,M,N; WZ12-8W,M,E
3.5
Closing Balance 30 June 2023 (arithmetic summation)
3.5
0
0

Prospective Resources (Horizon net)

China Block 22/12
2U Total Liquids MMbbl
2U Raw Gas Bcf
2U Sales Gas PJ
WZ12-8 (six independent opportunities)
2.6
Closing Balance 30 June 2023 (arithmetic summation)
2.6
0
0

Cautionary statement: Prospective Resources are the estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) relate to undiscovered accumulations. The estimates have both an associated risk of discovery and risk of development. Further exploration appraisal and evaluation is required to determine the existence of a significant quantity of hydrocarbons. The 2U Prospective Resources in the above table are unrisked volumes.

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T: +61 2 9332 5000

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