Frontier Oil to spend $5M for Cagayan Valley drilling

MANILA, Philippines - Australian oil and gas company Frontier Oil Corp. will start drilling an exploration well at the Nassiping-2 prospect in onshore Cagayan Valley at an estimated cost of $5 million, the Department of Energy (DOE) said.

Previous gas samples from the field have shown that the gas is predominantly “methane and thermogenic in origin, with indications of an active gas-bearing section,” the company said.

The Nassiping-2 well was drilled in 1984 and penetrated a substantial, gas-bearing limestone section but was not flow-tested.

The government earlier awarded Service Contract 52 covering the Nassiping-2 prospect to E.F. Durkee and Associates, covering 96,000 hectares in Piat-San Jose, Northern Cagayan Valley.

Frontier holds an 80 percent interest in SC 52. Its focus of activities is on Nassiping-2, an existing well containing a previously discovered but untested gas discovery under an earlier agreement with E.F. Durkee.

Frontier and Phinma unit Trans-Asia Oil and Energy Development Corp. signed a farm-in option agreement for SC 52 recently wherein Trans-Asia has the option to acquire 10 percent of the block upon payment of an agreed amount.

Frontier has mobilized a rig from Thailand for the drilling operations expected to start in the third or fourth week of the month.

Meanwhile, Trans-Asia earlier reported that Frontier has decided to pursue its acquisition of 15 percent of the former’s stake in Service Contract 69 located at the Camotes Sea in Eastern Visayas.

The SC 69 block, according to previous studies, recorded more than 20 structures with potential for both oil and gas.

The service contract covers an area of 7,040 square kilometers in offshore Central Visayas surrounded by the islands of Cebu, Bohol and Leyte.