MANILA, Philippines - Another oil well will rise in Palawan after Nido Petroleum Ltd, an Australian company and PNOC-Exploration Corp. approved the working plan for the drilling of the Baragatan prospect.
The two companies are set to start drilling the new oil prospect, located 30 kilometers in offshore Palawan, Nido said in a regulatory filing. Nido and PNOC-EC are joint venture partners in Service Contract 63, which includes the Baragatan prospect.
In its announcement, Nido said both partners have approved the work plan and budget to drill the Baragatan Prospect. Nido holds a 50 percent participating interest in SC 63 and will be the technical operator during the drilling phase.
The Baragatan Prospect is a large well-defined -block with an estimated oil-in-place of 676 million barrels of oil with an upside potential of 977 million barrels.
The proponents place the recoverable oil volume at 115 million barrels with a potential of up to 166 million barrels.
In its announcement, Nido said its share of drilling costs is fully funded from current cash reserves and ongoing production revenue.
The joint venture is allotting $22 to $25 million, with Nido’s share estimated at $11 to $12.5 million. Nido will finance its share of the drilling cost from its current cash reserves and ongoing production from the Galoc oil field.
The two companies expect to start the drilling activities as soon as possible, possibly within the year.
“The joint venture is progressing activities to secure a jack-up rig for the drilling of the exploration well and will drill the well as soon as practicable,†Nido said.
The joint venture through PNOC-EC has also secured the Strategic Environmental Plan Clearance (SEP) from the Palawan Council for Sustainable Development (PCSD) for its exploration activities within the block.
“I am pleased the joint venture has approved the drilling of the high impact Baragatan oil Prospect, in SC 63. A successful discovery has the potential to materially change the value of Nido Petroleum Limited. We are fully funded for this well from current cash reserves and ongoing production, and we look forward to securing a rig and updating the market accordingly on timing,†said Nido managing director Philip Byrne.