XCL-China Ltd. and Apache Corporation have announced the successful testing of their first well drilled under a production sharing contract with the People's Republic of China. The completion of the Zhao Dong C-1 comes only 13 months after commencing operations on the 50,000 acre shallow-water block in Bohai Bay.

Over a dozen prospects have been generated from the interpretation of over 1,000 kilometers of reprocessed and newly acquired 2-D seismic data.

Geologically the Zhao Dong Block is located in the Huanghan Depression of the North China Basin, one of the most prolific oil producing provinces in China. The adjacent Dagang Field Complex has produced in excess of 650 million barrels of oil. The basin developed as a result of extensional oblique rifting which commenced during the Late Cretaceous with maximum extension in Early Tertiary. Cenozoic fluvial-lacustrine sediments of Oligocene, Miocene and Pliocene age comprise the basin fill. Reservoir quality sands occur throughout the section. Lake deposits within the Lower Oligocene are the principle source rocks. Additional potential is associated with pre-Tertiary horst blocks or buried hills.

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