DOE approves Trans-Asia oil drilling project in E Visayas

Trans-Asia Oil and Energy Development Corp., the oil and gas exploration arm of the Phinma Group,  has been granted approval to drill a well in Eastern Visayas.

In a disclosure to the Philippine Stock Exchange (PSE), Trans-Asia Oil said the Department of Energy has given the group developing Service Contract 51 the go-signal to start the drilling activities in the area.

“DOE approved the entry of the SC 51 consortium into the third sub-phase of the exploration period  which entails a commitment to drill one exploratory well in the contract area in Eastern Visayas,” the company said.

Aside from Trans-Asia Oil with a six-to 67-percent share, the other members of the SC 51 consortium are: Alcorn Gold Resources Corp. (9.32 percent), PetroEnergy Resources Corp., (4.01 percent) and NorAsian Energy Ltd., subsidiary of Otto Energy Ltd. of Australia, with 80 percent.

The SC covers a 444,000-hectare area in the Eastern Visayas region. The contract area consists of two blocks an onshore-offshore block over Northwest Leyte and a largely deepwater block in Cebu Strait, between the islands of Cebu and Bohol.

The DOE awarded the SC to an all-Filipino consortium on July 2005. The consortium is composed of Trans-Asia (33.34 percent participating interest), Alcorn Gold, 46.6 percent and PetroEnergy, 20.06 percent.

Trans-Asia was chosen as the operator in charge of technical operations.

The East Visayas consortium committed to undertake a new minimum 250-kilometer seismic program over the Cebu Strait and an engineering study of the 1994 Villaba-1 gas discovery in offshore Northwest Leyte, within the first 18 months of the contract.

The partners have successive options to drill exploratory wells during the balance of the seven-year exploration period starting 2005.

On Aug. 8, 2005, the SC 51 consortium entered into a farm-in agreement with AustralAsian Energy Ltd. and Ottoman Energy wherein the two foreign firms will each acquire 40 percent participating interest in SC 51 by undertaking certain work obligations of the farmors under the contract.

The farm-in agreement was approved by DOE on Aug. 16, 2005.