Two oil wells in Palawan seen to yield over 35 million barrels

MANILA, Philippines - Australian exploration firm Nido Petroleum Ltd. said yesterday two of its oil discoveries in Service Contract 54 off Nortwest Palawan have the potential to yield over 35 million barrels of oil.

Nido said based on the independent assessment of ISIS Petroleum Consultants Pty Ltd., Yakal-1 has a potential of up to 10.7 million barrels and 24.5 million barrels at Tinadalo-1 with a recovery factor of 35 percent and 45 percent, respectively.

Kairiki Petroleum, another Australian exploration company, owns 40 percent of SC 54 while Nido controls 60 percent.

Last year, there were indications of strong oil potential from the two wells at a depth of 78 to 93 meters for Yakal-1 and 124-144 meters for Tindalo-1.

 “Since the SC 54 joint venture completed drilling the two back-to-back discoveries in October 2008, Kairiki has eagerly awaited the independent assessment of the resources in Tindalo and Yakal. The receipt of the independent report on our two initial discoveries confirms our view of the increased prospectivity of the SC 54 permit,” Kairiki managing director Laurie Brown said in a disclosure to the Australian Stock Exchange.

According to Brown, the assessment results provide a platform for the joint venture to rapidly and cost effectively commercialize this resource.

“We believe that this is an exciting project, offering the capability through cash flow proceeds to potentially self fund additional potentially high value projects such as Yakal and/or other discoveries and prospects in the area. We look forward to realizing the value this opportunity presents, including the impact on the greater inboard portfolio,” Brown said.

Joanne Williams, Nido deputy managing director, on the other hand, said “the contingent resources confirmed at Tindalo and Yakal together with the opportunity for early cash flow is very exciting, potentially creating a second revenue stream for Nido as early as 2010.”

“The early appraisal information on reservoir productivity this could supply will also be critical for our future plans in the area as the Tindalo-1 well was not tested at the time of discovery. With a rig mobilized to the area, and subject to promising initial results from Tindalo, potential follow-up programs could include a Yakal production test or further drilling immediately afterwards,” Williams said.