Australian firm Nido Petroleum Ltd. is expected to invest $75.5 million—roughly P3 billion at the prevailing exchange rate—for its share in the planned drilling of exploration wells within four oil and gas service contracts off northwest Palawan.
In a report, global investment bank Canaccord Genuity disclosed that Nido Petroleum’s “net share” in terms of prospective resources in these four wells alone would reach 995 million barrels of oil and approximately 1 trillion cubic feet of gas.
“Nido has a strong portfolio of development options going forward. In the success case, Nido will hit production of 1.5 million barrels per year in 2014 (equivalent to 4,040 barrels per day),” noted the Canaccord Genuity report.
Nido and its partners are expected to drill within the Apribada prospect, which is covered by Service Contract 63; Lawaan prospect, within SC 54A; Pawikan prospect, SC 54B; and the Balyena prospect within the SC 58 block.
The planned investment for these four wells is on top of Nido’s expected investment in the Galoc oil field off Palawan, where partners are embarking on the Galoc Phase II development plan. Under this plan, partners are looking to drill two wells to extend the life of the field and increase daily production up to 12,000 barrels of oil per day.
A third well may likewise be drilled by Nido and its partners in Galoc, within the so-called Galoc northern exploration prospect. A decision is expected by end-March.
“The Galoc northern exploration prospect is an exciting opportunity that has the potential to double Galoc field reserves. It provides significant upside to Nido beyond the Galoc Phase II development. With the operator, Otto Energy Ltd., currently completing subsurface work with volumetrics and risking, we anticipate a drilling decision by end of the first quarter 2013,” the report further stated.
Nido Petroleum and its partners are also looking to redevelop the West Linapacan site, covered by SC 14C2.
“The company has strong production from its existing Philippine operations, Galoc Phase I and we see significant short-term production growth from the Galoc Phase II expansion and West Linapacan. Nido also has a large inventory of exploration assets and we see the company’s high working interests and independently certified estimates as attractive to potential farm-in parties,” the report stated.