OREANDA-NEWS. October 17, 2014. Australian independent ROC Oil and partner Horizon Oil announced they have discovered oil at well WZ12-10-1 in Beibu Gulf Block 22/12, offshore China.

The well, the first of two exploration wells scheduled to be drilled on the block, was drilled to a depth of 1,406 meters (4,612 feet) and "discovered oil in the very top of the Jiaowei (T42) formation over an interval of 5.5 meter, with a high porosity net oil pay of 4.2 meter," ROC said in a statement to the Australian stock exchange.

A sidetrack well was then drilled and confirmed oil in T42 with a thicker oil pay of 5.5 meters, the company added.

"This discovery will be evaluated on how best to integrate it into the Beibu project," and a rig will soon be moved to the site to drill the second and final exploration well in the program, ROC said.

Well WZ12-10-1 is located 4.7 km (2.9 miles) northeast of the WZ12-8W platform and 2.7 km west of the WZ12-8E discovery wells, ROC said.

"This oil discovery adds potentially valuable incremental oil to the Beibu project. The location of the oil discovery allows ROC and the joint venture to evaluate alternative development scenarios, particularly integration with the Beibu WZ12-8E oil discovery," ROC CEO Alan Linn said.

In the exploration phase, ROC has a 40% operated stake in the Beibu Gulf project alongside fellow Australian independents Horizon Oil and Petsec which have a combined 55%, while South Korea's Majuko has the remaining 5% stake.

Horizon and ROC were planning a merger of equals before China's Fosun International in August made a A\\$474 million (\\$420 million) cash takeover offer for ROC.

If the new find is deemed commercial and goes into production, China's state owned CNOOC assumes operatorship with a 51% share during the development and production phase, reducing ROC's share to 19.6%, Horizon and Petsec to 26.95% and Majuko to 2.45%.

In addition to its 19.6% share in the Beibu Gulf oil project, which produced 11,769 b/d in the quarter ended June 30, ROC has interests ranging from 11.7%-39.2% in the Zhao Dong oil fields in Bohai Bay, which produced 16,239 b/d in the same period. The all-cash bid for ROC was Hong Kong-listed Fosun's first move into the oil industry.

The diversified Shanghai-based company lists its main businesses as insurance, industrial operations, investment and asset management.

In mid-September, Fosun was one of 25 Chinese companies that invested a total of Yuan 107.1 billion (\\$17.4 billion) to jointly buy a 29.99% stake in China's state owned Sinopec Marketing Company.

Fosun paid Yuan 2.153 billion for a 0.603% share of Sinopec Marketing.