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12 May 2010
AGM Presentation
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Agenda
• 2009 review
– Site survey results
–
Environmental impact statement (EIS) – Contracting the Ocean Guardian
• 2010 outlook
–
Drilling Toroa – Contracting a deepwater rig
• Funding
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2009: Site surveys
• Why?
– Safety
– Risk mitigation and cost control
– Well design
– Government requirements
– Insurance
• 3 survey elements – Deployment of wave and current meters
– Digital site survey & benthic sampling
– Geotechnical boring
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2009: Site survey results
• Benign ocean currents confirmed by long term current meter data
• Multibeam & grab surveys indicate:
– Smooth/soft seabed at Toroa
– Hard/eroded seabed at Loligo
• Geotechnical boring confirmed very
different substrate at Toroa and Loligo,
which influenced well design
• No shallow hazards from high resolutionseismic data
• Site survey data had a key influence on
decision to contract Ocean Guardian
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2009: Environmental impact statement
• A comprehensive EIS submitted in October 2009
• Major document appropriate for first drilling in the East Falklands Basin• Initial well design
• Physical environment: sea bed, oceanography, meteorology
• Marine life, sea birds, habitats• Waste management, pollution, risks
• The EIS addendum is specific to Toroa, the Ocean Guardian andassociated support vessels
• Refined well design
• Detailed anchor plans• Environmental management plan
• Oil spill contingency planning
• EIS approved by FIG in March 2010
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2009: Contracting the Ocean Guardian
• BHPB developed concept of using the Ocean
Guardian during Q3 2009
• Rig upgraded to drill in 600 metres of water
– Additional BOP control systems, anchoring and riser
• Mobilisation costs shared with Desire &
Rockhopper
• Third slot in the drilling programme• Long lead drilling equipment ordered
• Shorebase established in the Falklands
– BHPB team in Stanley
• Estimated well cost ~$20 million net FOGL
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Why a two rig programme?
• Due to its location, the Toroa prospect is best drilled by an anchoredrig, such as the Ocean Guardian. Whereas, Loligo and the otherdeepwater prospects (>1000m water depth) are best suited to
being drilled by a dynamically positioned (DP) drillship or semi-submersible
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Prospects
Hersilia
Loligo
Endeavour
Nimrod
Toroa
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Toroa: The first well to be drilled in East Falkland Basin
• Toroa is a prospect within the Springhill Sandstone Play, which is the
proven play in the Argentine Magallanes basin to the west
• The Toroa prospect is supported by a seismic amplitude anomaly and a
positive CSEM response
• Oil shows were encountered in the site survey core over the prospect
• If Toroa is successful this would significantly reduce the risk on similar
‘follow-on’ prospects such as Lutra, Endeavour, Thulla & Inflexible• Toroa has potential mean reserves of: 1.7 billion barrels (un-risked)
– P90: 380milion bbls, P10: 2.9 billion bbls
• Expected to spud in late May
• Drilled to a total depth of ~2,700m below sea level
• Duration of well ~ 35days
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Contracting a deepwater rig
• BHPB actively looking for a deepwater rig
– BHPB continues to seek a suitable drilling rig in order to
commence drilling in late 2010
• Deepwater rig market improving, but still tight
• Possible rig share will be considered
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Funding
• Successful equity fund raisings in May & November 2009
• Current cash position c.$93 million
• Sufficient funds for a 3 well programme
• Farm-out on hold
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Summary
• Successful site survey programme
• EIS submitted & approved by Falkland Island Government
• 2 successful equity fund raisings• Sufficient funds for a 3 well programme
• Ocean Guardian contracted
• Toroa well to commence shortly withresults in June/July
• BHPB will contract a suitable rig to
undertake deepwater drilling campaign
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