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Phillips agrees to increase holding in Timor Sea field

April 8, 1996

Timor Sea Area [61556 bytes] A wholly owned unit of Phillips Petroleum Co. has moved to increase its equity interest in an undeveloped gas/condensate field in the Timor Sea off Indonesia and Australia. Phillips Petroleum International Investment Co. agreed to buy the Bridge Oil Timor Sea Inc. subsidiary of Parker & Parsley Petroleum Co., Midland, Tex., for an undisclosed sum.

Timor Sea Area [61556 bytes]

A wholly owned unit of Phillips Petroleum Co. has moved to increase its equity interest in an undeveloped gas/condensate field in the Timor Sea off Indonesia and Australia.

Phillips Petroleum International Investment Co. agreed to buy the Bridge Oil Timor Sea Inc. subsidiary of Parker & Parsley Petroleum Co., Midland, Tex., for an undisclosed sum.

Phillips will thus acquire an additional 22.5% interest in Bayu field in the Indonesian-Australian Zone of Cooperation A (ZOCA) Block 91-13. The trade could boost Phillips' ownership in the field to 60% from the present 37.5%, subject to partner rights.

Expected closing date is May 15.

Parker & Parsley said the sale of its Bridge Oil unit and other Australian subsidiaries could garner a combined $240.3 million (U.S.) for reserves estimated at 32 million bbl of oil equivalent.

Parker & Parsley plans to use net proceeds to pay bank debt. That will reduce its outstanding debt to about $340 million and leave the company with about 265 million bbl of oil equivalent reserves, mainly in Argentina, West Texas, South Texas and Louisiana, and the U.S. Midcontinent.

Phillips and remaining partners Oryx Energy 25% and Hardy Timor Gap Petroleum Ltd. 15% are evaluating plans to develop the field to feed a natural gas liquefaction plant, using Phillips technology, at an undisclosed onshore site.

Field operator Phillips Petroleum Co. ZOC and its original partners found Bayu field, 185 miles off Western Australia, early last year. Drilled to 10,443 ft in 236 ft of water, the group's 1 Bayu wildcat cut 459 ft of gross pay and flowed a combined 90 MMcfd of gas and 5,250 b/d of condensate on four drillstem tests in March 1995.

An appraisal well, 2 Bayu, cut a thicker gross pay zone-492 ft-and flowed 35 MMcfd and 2,100 b/d on one drillstem test last February. It was drilled to 10,495 ft in 240 ft of water, 4 miles north of the discovery.

The Phillips group has spudded 3 Bayu in 240 ft of water.

All the wells are on ZOCA Block 91-13.