NIDO Petroleum of Australia said Monday it was still interested in re-developing West Linapacan off northwest Palawan despite the termination of farm-in agreements related to the project.
“Nido remains committed to progressing a West Linapacan re-development project and will update the market further if there are any material developments,” managing director Phil Byrne said in a regulatory filing.
The Department of Energy has notified Nido of the termination of the farm-in agreements, according to the Australian company.
Byrne said Nido was not a party to these farm-in agreements and Nido’s existing 22.28-percent participating interest in the project was therefore not altered by the termination notices.
The farm-in agreement signed May 29, 2008 was terminated via a joint letter of termination dated Jan. 7, 2015.
With the termination letter, Pitkin Petroleum Plc’s and RMA West Linapacan Pte Ltd’s interests in Block C2 of Service Contract 14 (SC14) reverted to Philodrill Corp., Oriental Petroleum & Minerals Corp., Linapacan Oil Gas & Power Corp., Forum Energy Phils. Corp., Cosco Capital Inc. and PetroEnergy Resources Corp.
In 2008, Pitkin got a stake in West Linapacan in exchange for its leading Phase 2 redevelopment work in West Linapacan. This includes the drilling of one well, reserves re-certification, and related activities that were supposed to have been finished in December 2013.
However, despite a DOE extension to June 2014 and then again to end-December 2014, Pitkin did not complete the Phase 2 work program as committed. The partners said they considered this a breach of contract and were thus taking back their respective shares, which had contributed to the 58.2907-percent stake that Pitkin had in the project.
Pitkin, in its website, lists four assets in the Philippines, but its latest dropout would leave only two: SC 74-Linapacan Block off northwest Palawan and SC 53 in Mindoro island.
In September last year, Pitkin also withdrew from SC 6A Octon Block. As a result of Pitkin’s decision to opt out, Philex Petroleum may record an impairment loss of approximately P300 million during the third quarter of 2014.
In a disclosure to the Philippine Stock Exchange, the parent firm said its 53-percent-owned subsidiary had chosen not to enter Phase 2 of a farm-in agreement to earn a 70-percent stake in SC 6A, referred to as the Octon Block.
Pitkin will reassign its participating interest back to the farm-out partners after completion of the Phase 1 work program, Philex Petroleum said. Riza T. Olchondra