- Sacgasco (SGC) acquires a further 12.5 per cent interest in Service Contract 54A (SC54A) from oil and gas company TG World
- The energy stock now owns an 85 per cent operating interest in the Phillippines-based service contract and says it will confidently move forward with planned work programs
- SGC subsidiary, Nido Petroleum Philippines, submitted a work program and budget for the SC54A service contract and the company also plans to submit a drilling proposal early next year
- Company shares are down 10.3 per cent to close at 2.6 cents
Sacgasco (SGC) has confirmed the acquisition of TG World Energy Corp’s subsidiary, TG World, which holds a 12.5 per cent interest in Service Contract 54A (SC54A).
On November 18, the energy stock’s subsidiary, Nido Petroleum Philippines, secured the extension for Service Contract 58 (SC58) and SC54A from the Philippines Department of Energy (DOE).
At the time, Nido held a 42.4 per cent interest in and operated the service contract for SC54A, with Sacgaso’s other subsidiary — Yilgarn Petroleum — holding a 30.1 per cent interest to total a 72.5 per cent interest in the contract for Sacgasco.
To acquire the additional 12.5 per cent and take its interest in SC54A to 85 per cent, Sacgasco paid a consideration of $1 (one dollar) and up to a net royalty of around US$530,000 (A$742,245) to be paid after commercial production is achieved.
The acquisition is still subject to a number of conditions including regulatory approvals.
Managing Director commented on Sacgasco’s progress in the Philippines.
“Our team is diligently making great progress in the Philippines. With the service contract extensions secured and this most recent acquisition taking our working interest in SC54A to 85 per cent, we can confidently move forward with our work programs,” he said.
Nido submitted a work program to the DOE for SC54A and SC58 with firm budgets totalling US$263,502 (A$369,250). This work will include concept studies and preparing prospects for drilling.
Sacgasco plans to submit a drilling program proposal early next year and, subject to this and other elements, the company may choose to begin drilling in 2022.
Company shares were down 10.3 per cent to close at 2.6 cents at 11:30 am AEDT.