Philex-led Forum Energy seeks partners for SC 72

MANILA, Philippines - Forum Energy Plc is scouting for a partner for Service Contract (SC) 72 off Palawan to be able to continue exploration activities in the area. a top company official said.

“The company is also assessing potential partnerships in SC 72 to accelerate the development of the project, although there are no proposals currently in place,” Forum chairman Robert Nicholson said in a report.

But he stressed they are optimistic that SC 72 would continue to be one of the company’s major achievements.

“The completion of our first sub-phase work program over SC 72 will be a milestone for the company, since the last data acquisition which was concluded over   five years ago. We expect that this data will give us significant additional information that will enable the company to better assess the various development scenarios and potential partnership options for the SC 72 block at   a critical time in the development of this important asset,” he said.

Forum (through its 100-percent interest in Forum Philippine Holdings Ltd and Forum (GSEC101) Ltd). holds a 70 percent equity in the SC 72 licence. Philex Mining Corp. (through its interests in FEC Resources Inc and Philex Petroleum Corp.) controls 64.45 percent of the share capital of Forum.

SC 72, covers an area of 8,800 square kilometers and contains the Sampaguita gas discovery and a number of additional leads.

In 2008, a joint venture was formed with Monte Oro Resources and Energy Inc. (MORE) which qualified it for the Filipino Participation Incentive Allowance (FPIA). Through a 30-percent farm-out to MORE, the joint venture receives 7.5 percent of gross revenues shared with the government.

In February 2010, the exploration licence was converted into a service contract.

Forum Energy had been stressing that SC 72 is not situated in the disputed Spratlys Group of Islands. It said the contract is located in the Reed Bank basin which is at least 150 kilometers east of the disputed Spratlys Island and is closer to the island of Palawan.

Reed Bank has been subject of numerous exploration campaigns in the past under the Philippine contractual regime. The first petroleum contract in he area was awarded by the then Ministry of Energy in 1975.

Forum (through its 100-percent interest in Forum Philippine Holdings Ltd. and Forum (GSEC101 Ltd.) holds a 70 percent equity in the SC 72 licence. Philex Mining Corp. (through its interests in FEC Resources Inc. and Philex Petroleum Corp.) controls 64.45 percent fo the share capital of Forum.

Philex provided a financing facility worth $10 million that enabled Forum to progress the development of SC 72.