Husky/CNOOC agree to joint development in Indonesia

Husky Energy and CNOOC Ltd. have agreed to jointly develop the Madura BD gas and natural gas liquids field located offshore East Java, Indonesia. The agreement covers the development and further exploration of the Madura Straits Production Sharing Contract (PSC).

Offshore staff

CALGARY, Alberta--Husky Energy and CNOOC Ltd. have agreed to jointly develop the Madura BD gas and natural gas liquids field located offshore East Java, Indonesia. The agreement covers the development and further exploration of the Madura Straits Production Sharing Contract (PSC).

Under this transaction, CNOOC Ltd. will pay Husky $125 million to acquire a 50% equity interest in Husky Oil (Madura) Ltd., which holds a 100% interest in the Madura Strait PSC. The Madura Strait PSC is located about 40 km (25 mi) north of East Java and covers 2,794 sq km (1,079 sq mi) of exploration acreage. Ten wells have been drilled in this block since 1984, resulting in two discoveries, the Madura BD and MDA fields. In 2007, Husky signed three gas sale and purchase agreements for the sale of 100 MMcf/d (2.8 MMcm/d) of natural gas from the Madura BD field to East Java buyers.

CNOOC Southeast Asia Limited, a subsidiary of CNOOC Ltd., has depth of development and operations experience in Indonesia and currently operates two blocks and holds interests in numerous other blocks in Indonesia.
Husky holds a 100% interest in the East Bawean II PSC, offshore Indonesia, and will continue to focus on exploration and drilling activities in Indonesia. Husky recently completed a 1,410 sq km (544 sq mi) 3D seismic program over this block in preparation for a two well exploration program in 2009.

04/18/08

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