Forum Energy seals $10-M facility for West Palawan project

MANILA, Philippines - UK-based Forum Energy Plc has sealed a $10-million facility to fund its exploration works in West Palawan.

In a statement, Forum Energy said its subsidiary, Forum Philippines Holdings Ltd., inked the facility agreement with the company’s principal shareholder, Philex Mining Corp.

The Department of Energy approved the application of Forum Energy to convert its Geophysical Survey and Exploration Contract (GSEC) 101 to Service Contract 72 although the company has yet to firm up its work program.

Forum Energy said this facility will enable the company to fund its 70-percent share of a first sub-phase work program over SC 72.

The company has approved a work program of which Forum’s share is estimated to cost up to approximately $7.4 million.

This work program is designed to provide a more comprehensive valuation of the property and identify potential sites for appraisal wells.

It includes 3D seismic work over an area of up to 550 square kilometers over and around the Sampaguita gas discovery, and 2,200 line-kilometer of high resolution 2D over existing leads within the 8,800 square-km contract area. The acquisition of the seismic data is currently scheduled to be completed in the first half of 2011 and will then be subject to technical analysis.

In addition to moving ahead with the approved work program, Forum Energy said it continues to have discussions with potential strategic partners for the purpose of accelerating the development of SC 72. However no firm proposal is currently being considered.

“We are delighted to have been able to arrange this $10-million facility, on such attractive terms. “The facility will enable the company to fund its share of this important work program over SC 72. We look forward to releasing further updates as appropriate,” Forum Energy executive director Andrew Mullins said. 

SC 72 is located offshore West Palawan in the South China Sea. Forum Energy Plc (through its 100-percent interest in Forum Philippines Holdings Ltd. and Forum (GSEC101) Ltd.) holds a 70-percent equity interest in the contract area.

In 2006, results from a 248-sq-km 3D seismic survey over the area indicated 3.4 trillion cubic feet (TCF) of gas-in-place at the Sampaguita gas discovery.

Philex Mining (through its interests in FEC Resources Inc. and Philex Petroleum Corp.) controls 64.45 percent of the share capital of Forum.