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Husky Announces Results From Second Liuhua 29-1 Well

Source: www.gulfoilandgas.com 10/27/2010, Location: Asia

Husky Energy is pleased to announce it has completed the successful drilling of a second appraisal well at the Liuhua 29-1 discovery on Block 29/26 in the South China Sea.

The West Hercules deepwater rig drilled the Liuhua 29-1-3 well to a total vertical depth of 2,900 metres below sea level. The well, which encountered encouraging results, was drilled in a water depth of 682 metres at a location approximately three kilometres north of the initial Liuhua 29-1 discovery and has been cased for possible re-entry and development as a producing well at a later date.

“Core and log data have verified the presence of an excellent quality reservoir with approximately 60 metres of gas pay,” said John C.S. Lau, President and Chief Executive Officer, Asia Pacific. “This well demonstrates an extension of the Liuhua 29-1 field to the north and based on our knowledge of the reservoir, we are confident the well is capable of high flow rates. Once the well data is integrated, additional appraisal drilling will be determined to further define the resource size and prepare the Plan of Development for the field.”

The Liuhua 29-1 field is located about 43 kilometres northeast of the Liwan 3-1 field, the Company’s first major discovery in Block 29/26 and approximately 20 kilometres northeast of the Liuhua 34-2 field. This field is the Company’s third significant deepwater gas discovery in Block 29/26 in the South China Sea.

Following the completion of operations at Liuhua 29-1-3, the West Hercules rig resumed development drilling at the Liwan 3-1 field.

Husky Oil China Ltd., a wholly owned subsidiary of Husky Energy, expects to submit Plans of Development for the Liwan 3-1 field to regulatory authorities in the next few months. The first two fields in Block 29/26 – namely Liwan 3-1 and Liuhua 34-2 – will be developed in parallel, with first gas production targeted for 2013. Liuhua 29-1 will share common gas processing and transportation infrastructure.

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