MANILA, Philippines - The Australian-led consortium that holds a service contract (SC) in Cagayan Valley has started exploration works for an oil field at a cost of $5 million.
Frontier Gasfields Pty. Ltd., which holds a 30 percent stake in the consortium, said the perforation program has commenced.
“The perforation program will continue over the next few days to allow the multiple target zones to be perforated and hence open to the well bore,” it added.
A perforation is a tunnel that is punched in the casing or liner of an oil well that will be connected to the oil reservoir. It produces a channel for the oil and gas to flow from the producing formation into the well bore.
Aside from Frontier Gasfields, the SC 52 consortium is composed of Australia’s Frontier Oil Corp. with a 50 percent share and E.F. Durkee & Associates with the remaining 20 percent.
Last week, the firms said preparation works for the $5-million Nassiping-2 oil exploration project in onshore Cagayan Valley was completed.
“Flow testing of the well for hydrocarbons will commence immediately upon completion of the perforation program,” Frontier Gasfields said.
The timeline for the well test will depend upon results of ongoing exploration projects, the firm said.
SC 52 covers 96,000 hectares in Piat-San Jose in northern Cagayan Valley. The Nassiping-2 is an existing well containing a previously discovered but untested gas discovery.
It was drilled in 1984 and penetrated a substantial, gas-bearing limestone section but was not flow-tested.
Frontier Gasfields and locally listed Trans-Asia Oil and Energy Development Corp. earlier signed a farm-in option agreement for SC 52 wherein Trans-Asia has the option to acquire 10 percent of the block upon payment of an agreed amount.