Santos has a strong track record of fulfilment of work obligations in Vietnam over the past decade and is presently a Joint Venture partner in the Chim Sao and Dua fields and the operator of Exploration Blocks 13/03 and 123. Santos, on behalf of its JV partners is continuing to pursue opportunities in existing PSCs and in particular the drilling of the deep water prospects in Block 123 in the frontier Phu Khahh Basin. Unllke conventional shallow water operations, we.Hsin water depths greater than 2,000 metres involve significant technical risks and the requisition of special equipment with long lead thnes, Additionally, giver) that this will be the first deep water test in the PhD Khahh basin, si.gnificant attentioli. needs to be accorded to technical work and drill-planning to ensure that safe wells are drilled in the right locations and at acceptable cost. Following recommendations from the Block 123 Technical Workshop and TCM in March 2015, Santos on behalf of the Block 123 JV completed further work on the faulted Lower Miocene objective in the large Xuan Dai Prospect to ascertain possible compartmentalisation of this objective zone. Additionally, a possible transgressive sand sequence between the Lower Miocene and the overlying Late Miocene section was also investigated and volumetric calculations re-run and drilling locations selected for the Xuan Dai and Dan Phu Prospects, The results of this work and well design information were presented during a Block 123 Special OCM convened in Hanoi on 28 July 2015 (attended by Petrovietnam representatives). Santos informed the Block 123 JV that following this technical work, planning was now underway to drill the exploration commitment wells and a detailed time-une for well engineering and procurement was provided {Attachment A). Based on Santos' present estimates for the procurement of long-lead items and a better understanding of meteorological data, the. earliest safe spud date for the Xuan Dai prospect is February 2017 which is after the expiry of Exploration Phase 2 Of the PSC in June 2016.
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