PetroEnergy Group reports commercial viability of 2 wells in Maibarara field

Manila, Philippines - Maibarara Geothermal Inc. (MGI), the geothermal energy development unit of the PetroEnergy Group, reported yesterday that the two production wells in its power project have reached commercial viability early this week. 

In a disclosure to the Philippine Stock Exchange, PetroEnergy said the two production wells, which were part of the three-well workover rehabilitation conducted by MGI early this year, were put under a flow-test program last April 14 following modifications in the discharge test set-up. 

In the meantime, PetroEnergy said it plans to secure P2 billion in financing to support the project.

It said they are now undertaking other related studies and negotiations pertaining to grid interconnection, electricity sales, project financing, and power plant construction and operations are ongoing to determine overall project viability. 

“If these studies turn out positive, MGI will file for a declaration of commerciality for Maibarara with the Department of Energy (DOE) and secure financing for P2 billion sometime in the third quarter of 2011 to start field development,” it said.

MGI chairman Cesar A. Buenaventura expressed satisfaction with the results of the flow test program.

“There are still a lot of things to hurdle to ensure that we can go into actual commercial development, foremost of which is the drilling of two additional wells to augment steam supply and reinjection capacity for the 20 megawatt power plant,” he said.

“The shortage of locally available drilling rigs and manpower is a significant constraint in our project schedule. But with the support of the DOE, MGI partners, and the host community, we are confident that we can make the project viable.”

In the first week of May, the two wells attained commercial wellhead pressures, stable chemistry suitable for steam supply to a power plant, and an aggregate capacity of about 15 MW. 

The third well, the company said, is intended and is being used for reinjection of discharged brine.

MGI said it will continue the bore output measurements program until the end of May to see if the commercial output can be sustained. 

The company said drilling of two new wells, one for production and one for condensate injection, will be undertaken as originally programmed and budgeted.

According to MGI, it will also engage an international third-party firm to independently review its reserves estimation for the field.