OREANDA-NEWS. April 04, 2013. Horizon Oil (ASX: HZN) expects its share of oil production from the Beibu Gulf Project in China to exceed its forecast of between 3,500 and 4,000 barrels of oil per day after the start-up of production.

Up to 10 wells are now expected to be produced from the WZ 6-12 wellhead platform, compared with five in the original development plan.

On completion of the current production drilling campaign, the HYSY 931 jack-up drilling rig will finalise drilling of three additional development wells, A8, A9, and A10, which are designed to maximise returns from recent exploration success.

The two successful exploration/appraisal wells that were drilled at the end of 2012, the A6 and A7 wells will also be equipped for production.

Plateau production could be further extended with the development of the WZ 12-8E oil accumulation for which the project team is currently developing a plan for.

Oil has started flowing from the A5H and A2 wells through the WZ 6-12 wellhead platform following the successful installation, hook-up and commissioning of offshore facilities for the project.

The production trial period will continue while the next batch of three production wells, as envisaged within the original development plan scope, are completed and brought on production in the next few weeks.

A number of completion activities relating to hook-up and commissioning are still in progress. The WZ 6-12 operations will be constrained by simultaneous activities for a number of weeks whilst both drilling and commissioning works are finalised.

An independent review and audit of the Beibu Gulf Project reserves carried out by RISC has increased Proved Reserves by 24% to 22.9 million barrels of oil (MMbbl) as of 31 December 2012.

Proved and Probable Reserves have increased by 18% to 28.3MMbbl while Proved, Probable and Possible Reserves have increased by 25% to 36.8MMbbl.

This incorporates the results of the three exploration/appraisal wells drilled on the WZ 6-12 North and South structures during 2012.

Horizon has a 26.95% working interest in the Beibu Gulf project while fellow Australian Roc Oil (ASX: ROC) has 19.6%. The other partners are CNOOC (51%) and Oil Australia (2.45%).

The company had USD48.4 million (AUD46.43 million) in cash as of 31 December 2012.