IPC hits gas and oil offshore Malaysia

June 24, 1997 International Petroleum Corporation ("IPC") gave the results of the first production test of the Bunga Seroja-1 well. Bunga Seroja-1 is the latest exploration well on Block PM-3 and was drilled to evaluate the gas channel sands (known as the "H Group") which until now had not been explored. Bunga Seroja-1 was drilled to a total depth of 6,988 feet.
The first test flowed at an average rate of 50 mm cfpd of gas with 1,200 barrels of 56 API condensate per day from the interval between 5,842 feet and 5,878 feet. The carbon dioxide level was less the 1 % which means that the gas is extremely high quality. One further test will be conducted shortly. The first test results give an excellent indication that the proven gas reserves of Block PM-3 could significantly increase. In addition, Bunga Seroja-1 encountered an oil bearing sand (within what is known as the "I Group") which contains very similar oil to that of the Block's proven reservoirs. The potential of this new unit is currently under review but has not yet been tested because of time constraints due to Phase I commercial development of Block PM-3.
There are numerous other similar prospects across the Block and as a result of this latest success, several exploration and appraisal wells are planned for 1998. The overall oil and gas potential of the Block could be substantially upgraded from its current commercial standing.

Once the Bunga Seroja-1 well has been suspended, the drill rig will move over to the Bunga Kekwa wellhead jacket in order to tie-back and complete 3 of the existing wells as part of Phase 1 development of Block PM-3. Topsides for the Bunga Kekwa jacket as well as the FPSO are now ready for installation and commissioning. Commercial oil production is expected to commence shortly at an initial rate of approximately 18,000 barrels of oil per day.
IPC operates Block PM-3 with a 26.44 % working interest. Petronas Carigali SND BHD has a 46.06 % interest, Sands Petroleum AB has a 15 % interest and PetroVietnam Exploration and Production has a 12.5 % interest.