Polyard Petroleum (stock code: 8011), through its subsidiary China Sino Oil, began drilling Mawar-1, located in Block M, Brunei Darussalam on 26 August 2010.

Mawar-1 is the first well drilled in Block M, Brunei Darussalam, since 1988. Block M is considered under-explored because of the lack of concerted exploration effort using modern techniques for over two decades.

Block M occupies an area of approximately 3,011 sq km in the Baram Delta Basin and is the largest onshore permit in Brunei. The Block contains the Belait Anticlinal Trend along which hydrocarbon seeps occur and oil and gas were produced as a result of previous drilling. The Block is being explored under a Production Sharing Agreement signed with Brunei National Petroleum Company Sendirian Berhad (“PetroleumBRUNEI”), the national oil company of Brunei, in August 2006.

The Mawar-1 prospect has estimated recoverable volumes of up to 9 million barrels of oil. Mawar-1 is characterised as a moderate to low risk drilling opportunity due to the available offset well control and 3D seismic data set.

Block M is one of the few areas tendered out by PetroleumBRUNEI for oil exploration and production in the past decade. Despite Brunei being one of the top oil producers in Southeast Asia, with an output of 148,212 barrels per day (“bpd”) in 2009, its overall oil production has been ping in recent years (2008: 175,000 bpd). We envisage that Block M will have the prospect of increasing the country’s oil and gas reserves,” said Mr Kuai Wei, Chairman of Polyard Petroleum.

Mawar-1 is expected to take approximately 28 days to drill and evaluate on a trouble free basis. Upon completion of drilling at Mawar-1, the rig will be moved to the Markisa-1 location. Markisa-1, located 850 m north of Mawar-1, is expected to be the second well being drilled in Block M. Site construction of Markisa-1 has been completed, and test of a shallower objective which has previously been found to be oil bearing will be conducted. The Markisa-1 prospect has estimated recoverable volumes of up to 3 million barrels of oil.

Mawar-1 is the first well drilled in Brunei by Polyard Petroleum and its t venture partners in 2010. The t venture partners are Tap Energy Borneo Pty Ltd. (39%), KOV Borneo Limited (36%) and Jana Corporation Sendirian Berhad (4%). Tap Energy Borneo Pty Ltd. is currently the operator for the t venture.

In order to support the development of the Group’s projects in the Philippines, Polyard Petroleum proposed to issue 811,200,000 new shares pursuant to a rights issue. The net proceeds (HK$46 million to HK$55 million) will be mainly used for its gas and coal projects in the Philippines, as well as for general working capital.

Updated：2010-08-26