Nido Petroleum mulls going into next phase of Galoc oil drilling

MANILA, Philippines - Australia’s Nido Petroleum Ltd., an oil and gas exploration company focusing on the offshore Palawan Basin, plans to enter the second phase of its oil drilling activities in the Galoc field or Service Contract 14.

“The Galoc joint venture continues to assess further facility and subsurface development options for Phase 2 of the Galoc oil field development,” the company told the Australian Stock Exchange.

Nido said it is optimistic the exploration area may yield more potential reserves.

“In support of these efforts, it is important for Nido to have a more current and meaningful understanding of the developed reserves, the undeveloped reserves and any other remaining potential in the field,” it said.

To meet this challenge, Nido said is presently updating its reserves assessment of the Galoc oil field to incorporate performance data up to the end of September 2009.

“We will advise the market once this work is concluded in early 2010,” it added.

Galoc has been back on production since mid-August and the field continues to produce around 11,000 barrels of oil per day.

On Sept. 15, alone, 335,432 barrels of oil were lifted successfully from the field.

The field operator, Galoc Production Co. (GPC), has also advised Nido that future offtake has been sold to another repeat buyer and is due for offtake this month and the marketing of another production is well underway.

“With stable oil prices, continued healthy demand for Galoc crude throughout the region and a steady rate of production, Nido’s financial position remains healthy,” the company said.

It also reported that operations at SC 14 were not disrupted despite the onslaught of tropical storm Ondoy.

“As reported in the international press last week, Ondoy (international name Ketsana), ravaged Metro Manila in the Philippines and left at least 246 dead. Relief efforts are underway to assist those who have lost their homes and property. Nido is doing its part to help in these efforts. Fortunately, production at the Galoc oil field continued steadily during the passage of the stormy conditions,” it said.

Nido has over 2.94 million hectares of exploration and development assets in the northwest Palawan Basin in the Philippines.

Its core production assets include its 22.879-percent interest in the Galoc oil field.

Just as Galoc started flowing oil, Nido completed drilling in the neighboring exploration assets (SC 54A), resulting in two new oil discoveries at Yakal and Tindalo — a 100-percent strike rate that punctuates a drought of over 14 years in the Philippines.

Tindalo-1 has a potential of 24.5 million barrels of oil with a recovery factor of 45 percent. Yakal-1, on the other hand, has a potential of up to 10.7 million barrels with a recovery factor of 35 percent.

Nido earlier accepted the farm-in offer of another Australian firm Yilgarn Gold Ltd., a publicly-listed mineral exploration company, to hold 40 percent of SC 54.

Nido, along with several local oil companies as a consortium, presently operates the Nido and Matinloc fields, offshore oilfields located at Northwest Palawan that contributes about 5,000 barrels of oil per day to the Philippine energy mix.