Nido to pursue 5-well drilling plan in Palawan

Australian firm Nido Petroleum Ltd. remains confident in its Philippine exploration portfolio and vows to pursue its five-well drilling program even after encountering failure in its first well, the Gindara-1.

“We remain confident in and committed to the pursuit of our strategy in the Philippines and our drilling program in the Northwest Palawan Basin. Historical exploration success rates in the Palawan have been very high, with 79 percent of the 77 exploration wells drilled to date having encountered at least hydrocarbon shows,” Nido officials said in a regulatory filing.

Nido chief executive officer JV Emmanuel de Dios and chairman William Bloking added that the global energy majors remained interested and involved in investments in the Philippines.

These factors, the officials noted, validated the “overall appeal of the area as well as our belief in the portfolio’s value, and support our decision to forge ahead as planned.”

“Our portfolio of permits in the Northwest Palawan Basin provides us with a unique acreage position in the Philippines’ premier producing basin. We have spent more than $70 million to develop more than 90 drilling targets in our North West Palawan acreage portfolio, all of which have been covered with seismic and eight of which are considered ‘drill ready.’ This provides us with excellent long-term exploration potential and underpins our confidence in the company’s future growth prospects,” they added.

Nido Petroleum started its five-well drilling program in May, beginning with the Gindara prospect under Service Contract 54B. The program was meant to allow Nido to start tapping more than 11 billion barrels of potential oil resources off northwest Palawan.

“Nido is pursuing a five-well exploration program, involving various play types and water depths, rather than relying on a single well. While the first well in the program—Gindara—did not encounter hydrocarbons in commercial quantities, the well results will add significantly to our understanding of SC 54B and our other exploration acreage,” the officials explained.

In the meantime, Nido Petroleum reported that production at the Galoc oil field had surpassed the 7-million-barrel mark since it began producing in October 2008. For the first five months of the year, average production stood at 7,000 barrels of oil per day.

The outlook for the Galoc oil field was also upbeat, according to Nido Petroleum, given that the oil price outlook remained favorable.

An upgrade to the current mooring and riser system was being considered to further improve year-round up time, which suffered during the typhoon season in the second half of the year.

The joint venture operating the field covered by Service Contract 14C also plans a Phase 2 development for Galoc. The plan will allow the operator to access up to six million barrels of additional oil from the field and extend field life to 2017-2018 from the current expected field life of 2014-2015.