On 14 February 2020, KrisEnergy has entered a farm out agreement with a major international oil company for the transfer of its 100% interest in Block 115/09, situated in the northern Song Hong Basin, for a nominal cash consideration. The transfer of interest is subjected to a number of conditions including approvals from the relevant government authorities before 30 June 2020.  The deal includes the mandatory work commitments comprising of acquisition and processing of at least 850 sq km 3D seismic and drilling of one exploration well.   The main targets in the area are the Oligocene to Pliocene sandstones, ranging from deltaic and marginal marine to turbidite fan setting. An additional objective could be provided by the Miocene carbonates of the Tri Ton Group, which was targeted by 115-A 1X. Trapping mechanisms are expected to be tilted fault blocks, faulted anticlines, and stratigraphic trapping in the turbidite fans. Potential seals are present at various levels from Oligocene to Pliocene, with both regional and intraformational shales. High pressure conditions remain to be a key risk in this area.  The nearest discovery is Ken Bau gas and condensate discovery in Block 114. The discovery encountered net thickness of more than 100 m in the Miocene Phu Chu sandstones.   Kris Energy was awarded the sole operator of the block on 20 March 2014. Work commitment for the initial four-years term value of US$ 22.75 million includes reprocessing of 3,000 km of 2D seismic (completed), acquisition and processing of 850 sq km of 3D seismic and one exploration well. A two year extension period, if requested, effectively extends the well drilling until 20 March 2020.  Farm-in opportunity was offered since December 2015.  Background Information  The work commitment for the initial four-year term value at US$22.75 million includes reprocessing of 3,000 km of 2D seismic (completed), acquisition and processing of at least 850 sq km of 3D seismic and one exploration well. A two year extension period, if requested, effectively extends the well drilling until 20 March 2020.  KrisEnergy announced the award of Block 115/09 on 20 March 2014. The company was awarded 100% working interest and operatorship following negotiations between Vietnam Oil and Gas Group and KrisEnergy (Asia) ltd.  Block 115/09 covers most of the area that used to be Block 115, awarded to International Petroleum Vietnam Ltd in May 1990. The operator drilled the first wildcat in the block in 1991, 115-A 1X. The well was drilled to basement, TD at 3,536 m. The main target for this well was the NW-SE trending Miocene carbonate of the Tri Ton Group. The well encountered a 310 m gas column in a large Miocene build-up with gas accumulation of 10-20 Tscfg in place, of which 90% is CO2. The primary target was not tested because analysis proved its high CO2 content. A DST was conducted from the Pliocene clastics that had gas indications, but no significant hydrocarbons were thought to have been recovered on the surface. International Petroleum Vietnam Ltd relinquished the block in 1995.  The block lies just 25 km south of Ledong 28-1 discovery. The Ledong gas fields are in an area of maritime border dispute between China and Vietnam. Both sides are however optimistic that the rights dispute will be resolved in the near future. The Ledong 28-1 discovery represents a Pliocene Yinggehai Formation anticlinal trap within the central mud diapir structural belt of the Song Hong/Yinggehai Basin.  The exploration target in the southern part of Song Hong Basin includes the Ledong Anticline belt that covers the Southern Buried Hill Draped Anticlinal Belt located between the No.1 Fault and the Qiongdongnan Basin. Another potential target are Miocene carbonate build-ups, with Miocene shales as source rocks.
KrisEnergy has agreed to transfer its 100% in block 115/09 to a unidentified major IOC for a nominal cash consideration.