Papua New Guinea (“PNG”) is located in the south-western Pacific towards the eastern end of the Indonesian archipelago. PNG is rich in natural resources including oil and natural gas. Development of PNG’s oil and gas resources has been slow due to the rugged terrain and the high cost of developing infrastructure. Existing infrastructure is concentrated around major projects and urban areas. Existing oil refineries have the capacity to produce 32,500 barrels of product per day. A consortium led by ExxonMobil has begun the commercialization of PNG’s estimated 22.5 trillion cubic feet of natural gas reserves through the construction of a liquefied natural gas production facility scheduled for completion in 2014. In addition, planning of multiple pipelines in close proximity to our exploration licenses is underway. Current oil production from the developed PNG fields is around 45,000 bopd.
PNG has five sedimentary basins: Papuan, North New Guinea, Cape Vogel, New Ireland and Bougainville. The first three basins have been regarded by the petroleum industry as highly prospective for oil and gas. The Papuan Basin has had production since commercial discoveries were made in 1986. Even though there are numerous oil and gas seeps and shows in the North New Guinea and Cape Vogel basins, there is yet to be any major oil or gas field discoveries. Very little exploration has been made in the other two basins, which are New Ireland and the Bougainville basins. Along with the North New Guinea and Cape Vogel Basins, the New Ireland and the Bougainville basins are considered the frontier areas of exploration.
Eaglewood holds five license blocks:
Seismic data, magnetic and gravity surveys and information from field geology expeditions have mapped outcrops and defined petroleum systems. We have drilled one well on existing licenses - the Ubuntu-1 gas and gas condensate discovery on PRL 28 in Q1:2011. While our technical analysis of the properties is ongoing, several prospects have been identified on all our licenses. Although surrounded by discoveries, no oil or natural gas reserves have been attributed to the PPL 257, 258, 259 and 430 licenses held by Eaglewood.