The oil-prospective L20-50 onshore block is in the southernmost part of Thailand's most prolific basin, the Phitsanulok Basin.

Sun Resources told the market yesterday that this lightly-explored basin was geologically analogous to the nearby Phetchabun Basin, which Carnarvon and Pan Orient Petroleum had successfully explored over the past 12 months.

“The official award of highly prospective block L20-50 is eagerly awaited so that an aggressive exploration program can commence in the new year, which will hopefully lead to early drilling success on analogous volcanic play targets to the nearby Wichian Biri field area in the Phetchabun Basin.”

The Phitsanulok Basin also contains the Sirikit field, the country’s largest onshore oil and gas accumulation with more than 200 million barrels of oil.

“There is the possibility of near-term cash flow from a re-drill or workover of an old shut-in well in the block,” Sun Resources said.

“This well was not brought on production at the then-time of prevailing low oil prices because it required artificial lift to bring the oil to surface and this higher cost production methodology was not considered by the operator.”

Carnarvon Petroleum, as operator of the L20-50 block, plans to fast track exploration to reach a drilling decision on the block within the first two years.

“A similar exploration philosophy will be applied to exploration on the block in a basin that is a direct geological analogue to the nearby Phetchabun Basin,” Sun said.

To fund its share of the exploration program, Sun is placing nearly $2.5 million of new ordinary shares to clients of Hartleys.