Aussie firm to drill new well off Palawan

MANILA, Philippines—Australian firm Nido Petroleum Ltd. plans to drill another exploration well within Service Contract 63 by December as part of the company’s five-well drilling program within northwest Palawan.

“Nido and its partner in SC 63—PNOC Exploration Corp.—have committed to drilling a well in that contract area. This second well for Nido could be drilled as early as December 2011, although it is more likely that drilling will take place within the first few months of 2012,” said William Bloking, chairman of Nido Petroleum.

This will follow the drilling of an exploration well in the Gindara block, which is covered by SC 54B.

However, it was not clear in the regulatory filing as to which of the two prospective sites within SC 63 would be drilled. The service contract area contains the Aboabo discovery and the Kalapato site, which are estimated to hold 222 million barrels and 239 million barrels of oil, respectively.

SC 63 is located at the northeast end of the Tertiary-aged offshore fold and thrust belt, which was reported to be a “prolific hydrocarbon province.” The belt extends from Brunei through Sabah, Malaysia, and into the southern Palawan basin.

Apart from the well being drilled in the Gindara site and the two prospective sites in SC 63, Nido Petroleum’s five well drilling program also included the Balyena prospect (SC 58) and the Lawaan discovery (SC 54A). All five wells are expected to allow Nido and its partners to gain access to more than 11 billion barrels of potential oil resources off northwest Palawan.

“Success in any one of these wells will certainly be transformational for Nido. That said, we must also bear in mind that these are exploration prospects and, while technically quite robust, outcomes are still subject to risk. That is why it’s so important to drill a statistically significant exploration program—not a one-well wonder,” Bloking noted.

“By any measure, 2011 will be a very exciting year for your company. We have been working for years to build an outstanding exploration portfolio—and to mature the key prospects to the point of drill readiness—and we have now arrived at that point,” he added.