Newfield Exploration Co., Houston, has established more than 30 million bbl of recoverable oil worth a commercial development on 510,000-acre Block 16/05 east-southeast of Hong Kong in the Pearl River Mouth basin off China and sees several years of active drilling. The LF 7-1 well tested an equipmentlimited 6,000 b/d of 35[degrees] gravity oil from a single zone. An offset to Newfield's 2008 LF 7-2 discovery, it was drilled to test a downthrown anticline.

Success at LF 7-1 set up a deeper oil prospect in the same fault trap that Newfield may test in 2010 by drilling a downdip sidetrack. LF 7-1 went to a total depth of 10,000 ft in 350 ft of water and cut more than 75 m of high-quality oil pay in multiple sands.

Newfield expects to start production from the block in 2012.

"We are very encouraged by this discovery and its implications for our remaining prospects on this block and we expect an active drilling campaign here over the next several years," the company said.

Newfield shot 200 sq km of 3D seismic in 2007 to better assess the structural complex. It identified numerous independent untested structures analogous to this discovery. For example, the LF 7-6 structure 15 km northeast is to be drilled in 2010.

China National Offshore Oil Corp. has the right to participate in any development with a 51% interest.

Meanwhile, Newfield will accelerate by 6 months Phase II development drilling at East Belumut oil field in PM 323 off Malaysia.

It will drill three development wells in late 2009 and three more in early 2010 from the existing production platform at a cost of $36 million to hike 2010 oil production by 1 million bbl net. Newfield operates PM 323 with a 60% interest.

Copyright PennWell Corporation Sep 21, 2009

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