Tap Oil Limited recently engaged Perth based consulting group Discover Geoscience (Discover) to undertake an evaluation of the area surrounding the Manora Oil Field within the G1/48 concession, with a particular focus on identifying new exploration opportunities.

This engagement with Discover is part of a strategic initiative by Tap Oil to encourage new exploration and development activity in and around the Manora Oil Field to ensure the potential of the field and surrounding acreage is fully exploited. The existing Manora Oil Field infrastructure allows for discoveries within ~5km of the platform to be brought online for production within 2-3 weeks of drilling.

Due to the low cost of drilling and completion (~US$3.6 million per well gross or ~US$1.1 million per well net), the profit margin on new barrels from the Manora Oil Field is greater than US$35/bbl at current spot prices. The relatively low cost of drilling and development of identified prospects, and potential for high margin barrels make the identified prospects a compelling drilling opportunity.

Discover have identified 32 leads as part of their preliminary evaluation, with an unrisked total Oil Initially In Place (OIIP) volume of ~56 MMSTB net to Tap Oil. We caution that Discover’s analysis is a preliminary evaluation only, and the OIIP estimate does not meet the criteria of Prospective Resources and does not take account of recovery factors (which are typically 20-45% of OIIP volumes). This is in addition to Tap Oil’s 1P Reserves of 1.2 MMSTB, 2P Reserves of 2.1 MMSTB and 2C Contingent Resources of 1.1 MMSTB as at 30 June 2018 for G1/48. Tap Oil’s Reserves and Contingent Resources are shown in the tables below (refer to Tap Oil’s announcement of 11 July 2018 for further information).

Discover has defined all leads based on high quality 3D seismic in proven oil play fairways. Further evaluation is ongoing in order to generate drillable prospects and will take approximately ten weeks to complete. Tap Oil intends to present the high graded drilling opportunities identified from this evaluation to the G1/48 joint venture.

Tap Oil’s recent drilling campaign success is an indicator of the remaining potential in and around the Manora Oil Field. The initial production from MNA-20 and MNA-21 wells (part of the recent drilling campaign) has increased total daily production from the Manora Oil Field by ~38% to ~8,300 bopd gross (~2,500 bopd net). Both the MNA-20 and MNA-21 wells were producing within 2 days of completion.

The existing Manora Oil Field infrastructure will reduce development costs and lowers the Minimum Economic Field Size (MEFS) required for a discovery to be commercialised.

In addition to Tap Oil’s exploration strategy for the Manora Oil Field, work is being completed to further enhance value of the project, including:

▪ Converting the recent discovery of 0.5 MMSTB net 2C Contingent Resources in the 300 series sands in to Reserves and ultimately production; and

▪ Finalising the proposed 2019 development drilling program, which may include:

-- AT and BT wells targeting the 650 reservoir in the Central Fault Block and the 620/650 reservoirs in the Eastern Fault Block;
-- Development of the 300 series sands in the Eastern Fault Block, which may include three horizontal producers; and
-- Agreed exploration targets.