PNOC unit buys 15% stake in drilling project

PNOC Exploration Corp. is acquiring a 15-percent working interest in Service Contract No. 55, which contains highly prospective oil and gas blocks in offshore west Palawan.

In a regulatory filing, SC 55 operator Otto Energy Ltd. reported that the commercial terms of the farm-in have already been agreed upon and would be finalized in a farm-in deal to be signed by the company and PNOC-EC. The agreement will have to be approved by the Office of the President of the Philippines.

“Otto Energy is very pleased to welcome a partner of the quality of PNOC-EC into SC55. PNOC-EC brings substantial experience in the Philippine oil and gas industry to the SC55 joint venture,” said Otto Energy CEO Matthew Allen. “We look forward to progressing the high-impact exploration program with the Hawkeye-1 well in SC55 with PNOC-EC and our joint venture partners. Otto notes that the cost of this upcoming exploration program is likely to be considerably reduced as weaker oil prices impact on rig and contractor rates.”

Once the farm-in agreement has been finalized and approved, Otto Energy will control a 78.18-percent participating interest in SC55, while Palawan55 Exploration and Production Corp., a wholly owned subsidiary of Trans-Asia Petroleum Corp., will have a 6.82 percent stake in the block. The remaining 15 percent will be held by PNOC-EC.