VICTORIA PETROLEUM N.L. - Senex Energy...2010/03/31 · to resume starting September 2010. 19. Estimated net oil sales for the quarter of $0.6 million on gross oil sales of $1.6 million

36TH FLOOR, EXCHANGE PLAZA, 2 THE ESPLANADE, PERTH, WESTERN AUSTRALIA 6000 TELEPHONE: (08) 9220 9800, FACSIMILE: (08) 9220 9801, EMAIL: [email protected] WEBSITE: www.vicpet.com.au

CORRESPONDENCE TO PO BOX Z5441, ST GEORGES TERRACE, PERTH, WESTERN AUSTRALIA 6831

30 April 2010 Company Announcements ASX Limited Level 4, 20 Bridge Street SYDNEY NSW 2000 VPE QUARTERLY REPORT FOR THE PERIOD ENDING 31 MARCH 2010 HIGHLIGHTS FOR THE QUARTER - Victoria Petroleum N.L. (ASX-VPE) has at the end of the quarter $42.7 million cash on hand, and no

debt, a strong position in current markets. - VPE strong cash position provides the funds for the focussed Australian growth strategy on VPE’s

two key projects:

• Cooper Basin Oil exploration, development and production in South Australia and Queensland to provide immediate strong cash flow.

• Surat Basin Queensland coal seam gas (CSG) development to provide longer term significant

asset growth and cash flow. - Approval by VPE share holders of purchase of Permian Oil from QGC has increased by 50% VPE’s

interest in VPE’s proven Western Margin Oil SA Cooper Basin permits and VPE’s share of net oil sales revenue, current and future oil reserves and exploration upside.

- Production performance and 3D seismic mapping provide Growler Oil Field 3P recoverable reserve

estimate of 5.8 million barrels of oil added to Snatcher Oil Field 3P reserves of 1.5 million barrels. Current 3P gross reserves for the Growler and Snatcher Oil Fields are 7.3 million barrels (4.4 million bbls net to VPE).

- Gross production from VPE’s Cooper Basin oil fields peaked at estimated 1,600 barrels of oil per day

(bopd) end January 2010, a new high for the fields (960 bopd net to VPE). - Major end January/early February 2010, one in twenty year flood event and associated rains in the

Cooper Basin resulted in the temporary halt of all oil production from VPE’s Cooper Basin oil fields and drilling operations.

- Net VPE oil production to sales estimate for the quarter prior to start of flooding was 25,294 barrels of

oil at an average net production rate of 815 bopd. - Net oil sales for the quarter estimate of $0.6 million on gross oil sales of $1.6 million. - It is anticipated that VPE Cooper Basin oil production will recommence in September 2010.

VICTORIA PETROLEUM N.L. A.B.N 50 008 942 827 Incorporated in Western Australia

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- To regain development and exploration drilling momentum in the Cooper Basin, a two rig drilling

program is planned to start September 2010 on 10 exploration and development wells defined by 3D seismic as road access to the Growler and Snatcher areas is resumed.

- Completion by operator QGC - a BG Group business, of first 2010 well in CSG core drilling program

in prime Surat Basin “LNG corridor” CSG permit ATP 574P. - Active drilling program of up to 21 wells through 2010 in VPE’s core oil and CSG interests with this

activity to be funded by $43 million cash on hand and oil sales net revenue. EXPLORATION ACTIVITY Cooper Basin, South Australia / Queensland 1. Operator and participant in nine well oil exploration program planned in second half 2010 in South

Australian and Queensland Cooper Basin where VPE holds major gross and net acreage exploration area with average 50% interest in 14 permits.

2. VPE exposure to SA Cooper Basin exploration success increased by 50% with acquisition of Permian

Oil Pty Ltd from QGC approved by VPE shareholders, taking VPE interest from 40% to 60%. 3. Final seismic processing and interpretation of 268 square kilometres 3D seismic data completed in

March 2010 has defined 19 exploration drilling targets on the significant “Jurassic oil fairway” in western portion of PEL 104 and PEL 111.

4. The “Jurassic oil fairway” fairway termed the “Western Margin Oil Trend”, covers up to 1,200 square

kms, with potential for further exploration success to contain a resource of up to 100 million barrels of oil in place. VPE is the project operator. (VPE – 60%).

5. The Western Margin Oil Project 3D seismic survey is interpreted to define in PEL 104 and PEL 111

the distribution of the productive Birkhead channel sand and associated structures as seen in the Growler and Snatcher oil fields and the Wirraway, Warhawk and Tigercat oil discoveries. Birkhead channel sands have tested at up to 2,040 barrels of oil per day in the Growler Oil Field.

6. Exploration drilling of up to seven wells planned to commence in 3Q 2010 in PEL 104/PRL 15/PEL

111 on the Growler-Wirraway-Warhawk-Snatcher oil field trend in the northern part of the Western Margin Oil Project, based on interpretation of the 3D seismic data and with JV approval. (VPE - 60%).

7. The first VPE oil discovery in southwest Queensland Cooper Basin permit ATP 752P, Cuisinier-1, is

targeted to be placed on production in May 2010. (VPE – 20%). 8. Continuing exploration in ATP 752P with interpretation of 300 square kilometre 3D seismic programs

ongoing, to determine exploration and appraisal drilling targets for 1H 2011 drilling. 9. In South Australian Cooper Basin permit PEL 115, production testing of the Murta and Permian oil

shows in Fury-1 and Permian oil shows in Airacobra-1 is planned to commence late June 2010 as road access allows. Exploration drilling of the Starfighter Prospect is planned to follow. (VPE – 33%).

Surat Basin Coal Seam Gas Interests, Queensland 10. The potential gross Coal Seam Gas (CSG) in place resource in three VPE permits in Surat Basin,

Queensland could be as high as 2,700 Peta Joules (PJ) with potential net recoverable gas resource to VPE in excess of 540 PJ.

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11. Don Juan CSG Project 2P certified reserves in ATP 771P are 101 PJ (45 PJ net to VPE) and 3P

certified to 197 PJ (89 PJ net to VPE). Operator, Bow Energy, plans a 2 well drilling program in 2H 2010 in adjacent ATP 593P to extend the Don Juan Project into ATP 593P and increase 3P reserves.

12. Bow Energy advises investigations are underway on monetisation of the Don Juan CSG Field

including connection into the nearby Queensland Gas Pipeline which is approximately 15 kms east of the field. (VPE – 45%).

13. In Surat Basin permit ATP 574P, up to three CSG wells are planned to commence drilling in 2H 2010,

operated by QGC – a BG Group business. During the quarter, the Marcus-1 core hole was drilled to 1,041 metres in the Marcus Project area, encountering the expected thickness of coals averaging 28 metres in the Walloon Coal Measures.

14. Aim of this drilling in ATP 574P is to prove up an initial certifiable gross recoverable CSG reserve by

end of 2Q 2010. The CSG coals in the permit are interpreted to have a potential CSG resource in place of up to 1,500 PJ. (VPE – 30%).

15. In Petroleum Lease 171, adjacent to ATP 574P, the operator, QGC - a BG Group business, has

planned for up to 6 wells to be drilled in 2H 2010. The QGC drilling program is part of ongoing drilling program into the future on the Paradise Downs, Carla and Alex CSG projects to assess the in place CSG resource of up to 1,000 PJ. (VPE – 20%).

DEVELOPMENT AND PRODUCTION ACTIVITY

16. The purchase of Permian Oil from QGC was approved by VPE shareholders during the quarter and

has increased VPE’s share of oil production from the SA Cooper Basin by 50% from a net 40% working interest to 60%.

17. Total gross oil production to sales from the Australian operations over the quarter prior to being shut

in by flooding estimated at 42,156 barrels of oil at an average production rate of 1,359bopd. Net VPE oil production to sales for the quarter up to time of shut in was 25,294 barrels of oil at an average production rate of 815 bopd reducing to an averaged 281 bopd over the whole quarter. (VPE – 60%)

18. The reduction in total production during the quarter was a result of the shut in of all Cooper Basin

production end January/ early February 2010 due to 20 year flood event. Oil production is anticipated to resume starting September 2010.

19. Estimated net oil sales for the quarter of $0.6 million on gross oil sales of $1.6 million with average

Tapis oil price during the quarter of US$73/bbl (A$81/bbl). 20. The Growler Oil Field in PEL 104/PRL15, South Australian Cooper Basin, produced to sales during

the quarter prior to being shut in due to floods, an estimated gross 31,434 barrels of oil at an average combined gross rate of 1,014 bopd, with net production to VPE of 608 bopd. (VPE – 60%).

21. The Snatcher Oil Field in PEL 111, South Australian Cooper Basin, produced to sales during the

quarter prior to being shut in due to floods, an estimated gross 8,110 barrels of oil at an average combined gross rate of 261 bopd with net production to VPE of 157 bopd. (VPE – 60%).

22. Upon the resumption of production operations at the Snatcher Oil Field in 4Q 2010, the target for the

Snatcher Oil Field production is gross 900bopd. (VPE – 60%). 23. The Mirage and Ventura Oil Fields in PEL 115, South Australian Cooper Basin, produced to sales

during the quarter prior to shut in due to rain, an estimated gross 2,612 barrels of oil at an average combined gross rate of 84 bopd, with net production to VPE of 50 bopd. (VPE – 60%).

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24. Analysis of Growler production data and Mollichuta 3D seismic has resulted in an estimate of proved

plus probable (2P) recoverable oil reserves of 1.8 million barrels and additional possible recoverable reserve of 4 million barrels.

25. This provides a Growler Oil Field proved, probable and possible (3P) recoverable oil reserve estimate

of 5.8 million barrels with a 3P 3.5 million barrels net to VPE.(VPE – 60%). 26. The opportunity is present with the future successful drilling of the Growler-6 and 9 development wells

in 3Q 2010 to increase in the 4Q 2010 the Growler Oil Field gross production rate to sales to higher rates approaching 1800 bopd. (VPE - 60%).

27. Development success at Growler-6 and Growler-9 could bring a minimum of 0.7 million bbls possible

oil reserves into the 2P category. A further four Growler development locations remain to be drilled. 28. It is anticipated that upon the resumption of oil production in September 2010 and successful

development drilling, VPE oil production from existing oil fields will generate in FY 2011 a net cash flow to VPE estimated at $30 million, using a constant oil price of US$70/bbl and A$/US$= 0.90.

OTHER ASSETS & CORPORATE ACTIVITY 29. Victoria Petroleum N.L. has a 7.24% interest in Greenearth Energy Limited (ASX code: GER), an

active geothermal exploration company. 30. Cash and current investments as at 31 March 2010 to fund planned VPE exploration and

development drilling activities, as follows:

Cash at bank and on deposit (*excluding funds held in joint ventures)

: *$42,712,008

Current investments in listed companies valued at market : $210,361 Total : $42,922,369

John T Kopcheff Managing Director VICTORIA PETROLEUM N.L. Information contained in this report relating to hydrocarbon reserves was complied by the Managing Director of Victoria Petroleum N.L., J.T. Kopcheff, BSc (Hons Eco.Geol), FAIMM, MAAPG, MSPE, MPESA, who has over 38 years experience in the practice of petroleum exploration geology and geophysics.

For information on Victoria Petroleum N.L. drilling activities visit our website at www.vicpet.com.au Competent Person Statement ‐ The estimates of gas reserves and resources for the Don Juan CSG Field and Comet Block have been prepared by MHA Petroleum Consultants, LLC (MHA) in accordance with the definitions and guidelines set forth in the 2007 Petroleum Resources Management System approved by the Society of Petroleum Engineers. The reserve statement has been compiled by Mr Timothy L Hower Chairman of MHA, together with personnel under his supervision. Mr Hower, who has over 28 years industry experience, and MHA have consented to the inclusion of the technical information contained in this announcement.

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PERMIT - INTEREST %(After farmout – direct & indirect)

2010Apr May Jun Jul Aug Sep Oct Nov Dec

ATP 771P / ATP 593PSurat Basin CSG 45%

Don Juan Don Juan

ATP 574PSurat Basin CSG 30%

Peebs Marcus Pinelands Peebs Pinelands Peebs

PL 171Surat Basin CSG 20%

Paradise Paradise Paradise Lawton Alex/Carla

PEL 104Cooper Basin (Operator) 60%

E Growler-1 Jaguar-1 Spitfire-1


Tomcat-1 Mustang-1 Banshee-1 Sabre-1

PRL 15Cooper Basin (Operator) 60%

Growler-6 Growler-9 Growler-11


Fury-1 Starfighter-1

ATP 752PCooper Basin 20%

Cuisinier-1 Bligh-1

(Note: All well timing and production testing subject to rig availability, road access and JV approval)

CSG – Coal Seam Gas Drilling Production Testing CSG ActivityOil Activity

2010 CSG and Oil drilling schedule

Four VPE CSG projects in Surat Basin, QLD

QGC Gladstone LNG Project

PL 171/ATP 574P est. OGIP 2,500 PJ

– 9 wells in 2H 2010

ATP 593/771P Don Juan CSG Project 101 PJ 2P & 197 PJ 3P

– 2 wells in 2H 2010

PL 171 & ATP’s 574, 593 & 771P SURAT BASIN

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QGC operated projects ATP 574P & PL 171

NET VPE CSGPL 171 200 PJ OGIP

ATP 574P 450 PJ OGIP

TOTAL 650 PJ OGIP

Cooper Basin Oil projects

Western Margin Oil Project

pot. 20 mill bbls

Growler Oil Field

Snatcher Oil Field

Santos CharoOil Field

Fury Oil Field

Airacobra-1

PEL 111

Oil Field Key StatisticsGrowler Oil Field 1.8 mill bbls 2P & 5.8 mill bbls 3P

Snatcher Oil Field 1.5 mill bbls 3P

Gross production potential:1600 bopd

Appendix 5B Mining exploration entity quarterly report

+ See chapter 19 for defined terms. Appendix 5B Page 1

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report Introduced 1/7/1996. Origin: Appendix 8. Amended 1/7/1997, 1/7/1998, 30/9/2001.

Name of entity

Victoria Petroleum NL

ABN Quarter ended (“current quarter”)

50 008 942 827 31 March 2010

Consolidated statement of cash flows

Current quarter

$A’000

Year to date (9 months)

$A’000

Cash flows related to operating activities

1.1 Receipts from: (a) product sales 3,416 9,7871.2 Payments for: (a) exploration and evaluation

(b) development (c) production (d) administration

(1,102) (1,148) (1,344)

(849)

(1,952)(4,853)(4,395)(2,408)

1.3 Dividends received - -1.4 Interest and other items of a similar nature

received 195 431

1.5 Interest and other costs of finance paid - -1.6 Income taxes paid - -1.7 Other (prepayments, overhead recoveries) 612 1,360

Net operating cash flows

(220) (2,030)

Cash flows related to investing activities

1.8

Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets

(492)

- (1)

(8,492)-

(18)- Proceeds from sale of:

(a) prospects (b) equity investments (c) other fixed assets

-

14 -

-430

-1.10 Loans to other entities - -1.11 Loans repaid by other entities - -1.12 Other (provide details if material) - -

Net investing cash flows

(479) (8,080)1.13 Total operating and investing cash flows

(carried forward)

(699) (10,110)



Current quarter

$A’000

Year to date (9 months)

$A’0001.13 Total operating and investing cash flows

(brought forward)

(699) (10,110)

Cash flows related to financing activities

1.14 Net proceeds from issues of shares, options, etc. 21,087 36,7681.15 Proceeds from sale of forfeited shares - -1.16 Proceeds from borrowings - -1.17 Repayment of borrowings - -1.18 Dividends paid - -1.19 Other - -

Net financing cash flows

21,087 36,768

Net increase (decrease) in cash held

20,388 26,6581.20 Cash at beginning of quarter/year to date 24,355 18,2901.21 Exchange rate adjustments to item 1.20 3 (202) 1.22

Cash at end of quarter

44,746 44,746

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities Current quarter

$A’000 1.23

Aggregate amount of payments to the parties included in item 1.2 137

1.24

Aggregate amount of loans to the parties included in item 1.10 Nil

1.25

Explanation necessary for an understanding of the transactions

Directors’ fees, salaries and superannuation.

Non-cash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on

consolidated assets and liabilities but did not involve cash flows

Nil

2.2 Details of outlays made by other entities to establish or increase their share in projects in

which the reporting entity has an interest

Nil



Financing facilities available Add notes as necessary for an understanding of the position. Amount available

$A’000 Amount used

$A’000

3.1 Loan facilities - -

3.2 Credit standby arrangements - -

Estimated cash outflows for next quarter $A’000

4.1 Exploration and evaluation 100

4.2 Development 3,300

Total 3,400

Reconciliation of cash Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.

Current quarter

$A’000

Previous quarter

$A’000

5.1 Cash on hand and at bank 2,712 23,155

5.2 Deposits at call 40,000 -

5.3 Bank overdraft - -

5.4 Cash advanced to joint venture operations 2,034 1,200

Total cash at end of quarter (item 1.22) 44,746 24,355

Changes in interests in mining tenements Tenement

reference Nature of interest (note (2))

Interest at beginning of quarter

Interest at end of quarter

6.1 Interests in mining tenements relinquished, reduced or lapsed

Nil

6.2 Interests in mining tenements acquired or increased

Nil



Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rights together with prices and dates. Total number Number quoted Issue price

per security (see note 3) (cents)

Amount paid up per security (see note 3) (cents)

7.1 +Preference securities

7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions

7.3 +Ordinary securities

518,078,680 270,000

1,915,000 7,225,000

505,078,680---

$3.50

60.00c 40.00c

10.00c1.00c0.10c

7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs

Exercise of listed options:

47,075,192

Listed options underwritten by

RBS Morgans Corporate Ltd

upon expiry on 31/1/2010:

11,231,928

Share purchase plan:

34,388,000

Allotment of shares to Bow

Energy Ltd:13,000,000

47,075,192

11,231,928

34,388,000

-

25.0c

25.0c

30.0c

34.5c

25.0c

25.0c

30.0c

34.5c



Total number Number quoted Issue price

per security (see note 3) (cents)

Amount paid up per security (see note 3) (cents)

7.5 +Convertible debt securities

7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted

7.7 Options Expiry date:31/1/20128,775,000 -

Exercise price:

25.0c -

7.8 Issued during quarter

7.9 Exercised during quarter

Expiry date:31/1/2010

58,307,120 58,307,120

Exercise price:

25.0c -

7.10 Expired during quarter

7.11 Debentures (totals only)

7.12 Unsecured notes (totals only)

Compliance statement 1 This statement has been prepared under accounting policies which comply with

accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

2 This statement does give a true and fair view of the matters disclosed.

Sign here: ............................................................ Date: 30 April 2010

Company Secretary Print name: Denis Rakich



Notes 1 The quarterly report provides a basis for informing the market how the entity’s

activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of

interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

3 Issued and quoted securities: The issue price and amount paid up is not required

in items 7.1 and 7.3 for fully paid securities. 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive

Industries and AASB 1026: Statement of Cash Flows apply to this report. 5 Accounting Standards: ASX will accept, for example, the use of International

Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

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Documents

VICTORIA PETROLEUM N.L. - Senex Energy...2010/03/31 · to resume starting September 2010. 19. Estimated net oil sales for the quarter of $0.6 million on gross oil sales of $1.6 million