Forum Energy Plc to drill oil wells in Visayan Basin by 2012

MANILA, Philippines—Forum Energy Plc, a UK-incorporated oil and gas exploration and production firm, plans to drill wells within two prospective petroleum areas at the Visayan Basin by 2012.

This will enable the company to tap more sites across a significant acreage as covered by Service Contract (SC) 40, which is believed to contain “numerous onshore prospects and leads and significant offshore potential.”

In a regulatory filing, Forum Energy said it has already begun last May the interpretation of 3,000 line-kilometers of 2D seismic data that would allow it to identify possible drilling targets, specifically within the Toledo and Maya areas, that were also covered by the SC 40 license.

SC 40 is likewise home to the Libertad gas field, which is expected to start commercial production within the fourth quarter this year, according to Forum Energy. Once the field starts producing gas, Forum Energy’s partner Desco Inc. will be able to begin generating power for Cebu.

The Libertad gas field lies 100 kilometers north of Cebu City.

Forum Energy, through majority-owned unit Forum Exploration Inc., and Desco, a provider of petroleum and geothermal products and services in the Philippines, signed in 2009 a gas sale and purchase agreement (GSPA) to develop the gas field for power generation. The GSPA was approved by the Department of Energy in July 2009.

Under the agreement, Desco had to install a 1- to 1.5-megawatt power-generating unit in Bogo, Cebu, using GE Jenbacher gas engines.

Forum Energy currently holds a 66.7-percent interest in SC 40 license, which covers the northern area of Cebu Island and the adjacent offshore areas in the Central Tañon Strait and Visayan Sea. Since 1994, a total of 15 wells have been drilled offshore in the Visayan Basin, 13 of these on the acreage covered by SC 40.

In a related development, Forum Energy reported in the same filing that it would complete the interpretation of seismic data from the highly prospective SC 72 within the fourth quarter of 2011.

The SC 72 joint venture has already completed earlier this year the acquisition of 564,887 square kilometers of 3D (three-dimensional) seismic data collected over the Sampaguita gas field and 2,202 line-kilometers of 2D seismic data over the remainder of the block.

The interpretation of these data will allow the SC 72 joint venture to identify drillable targets within the Recto Bank. The Sampaguita prospect alone has been estimated to contain as much as 3.4 trillion cubic feet of gas. Aside from this large discovery, the SC 72 field was reported to contain at least eight other potential leads.

Between now and mid-2013, the SC 72 joint venture plans to spend $86 million to pursue exploration activities, which will include the drilling of an appraisal well and an exploration well.

Forum Energy holds a 70-percent interest in the SC 72 license, while the remaining 30 percent is held by Monte Oro Resources and Energy Inc.