Forum Energy to push ahead with Sampaguita gas drilling, cites upbeat prospects

MANILA, Philippines—UK-registered Forum Energy Plc. would proceed with the $75-million drilling program for the Sampaguita gas discovery off Palawan on improved resource estimates, Philex Mining Corp. and Philex Petroleum Corp. said in separate disclosures.

The Sampaguita concession, which is covered by Service Contract No. 72 (SC72), is located off the northwest coast of Palawan island along the Recto Bank, where the deposit is being touted to be potentially bigger than the Malampaya field.

“The Weatherford Report shows an improvement in the resources previously known and supports the case to proceed with the drilling program,” Robert Nicholson, executive chairman of Forum Energy, said in the disclosure cited by Philex Mining and Philex Petroleum.

“We will continue discussions with our major shareholders, our joint-venture partner and our advisers to determine how the SC72 drilling program, which we anticipate will cost a total of $75 million, will be funded,” Nicholson said.

Philex Petroleum Corp. holds a total direct and indirect interest of 64.45 percent in Forum Energy. Philex Mining, in turn, owns 64.79 percent of Philex Petroleum.

Forum Energy, a UK-incorporated oil and gas exploration and production company focused on the Philippines, has received a report by Weatherford Petroleum Consultants on the interpretation of new 3D and 2D data acquired over the Sampaguita project, also known as SC72, in 2011.

In 2011, 2,202 line-kilometers of 2D seismic data were acquired over SC72 in order to further define additional leads already identified, and 565 square kilometers of 3D seismic data were acquired over the Sampaguita Gas Field in SC72.

The interpretation of these surveys has now been carried out by Weatherford. Their report has given the directors a better understanding of the Sampaguita Gas Field and identified a prospect in the North Bank, which is located to the north of Sampaguita within SC72. In addition, the report has identified a number of potential drilling locations.

Forum Energy is traded and listed in the alternative investment market of the London Stock Exchange.

About 26 percent of Forum Energy is controlled by Hong Kong-based Tidemark Holdings Ltd., which local miner Atok-Big Wedge Co. bought in October 2011.

Forum Energy has a 70-percent equity in SC72. The remaining 30 percent stake in SC72 is owned by Monte Oro Resources and Energy Inc., which is led by businessman Enrique Razon. Atok vice chairman Walter Brown’s A.Brown & Co. owns 11.4 percent of Monte Oro.