NOCAL re-emphasizes that AP is in the process of appraising their discovery, which they announced in February (2012). Only further drilling will determine if there are commercial quantities of oil and that the announcement by AP was intended to inform the public, as required by all public companies, about the potential prospects of its ongoing appraisal program.
Oil and gas exploration phases include exploration drilling, appraisal, development, production and decommissioning. The process from exploration to exploitation on average, takes at least 5-7 years.
The ongoing appraisal drilling by AP is aimed at evaluating the size and nature of their reservoir to determine the number of confirming or appraisal wells required, and not for production as is being reported. This appraisal drilling program will determine whether potential discovery in Block LB-09 is commercially viable (as determined by the terms of the agreement), which could eventually ensure a progression to the development phase.
NOCAL reiterates that even if the ongoing appraisal programmes determine the commercial viability discoveries, commercial production of oil in our off shore basin may yet be a decade away.