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- Sacgasco’s (SGC) subsidiary Nido Petroleum Philippines has entered a farm-in agreement with the Service Contract 6B (SC 6B) Joint Venture
- Nido will fund an Extended Well Test and become the operator of the Cadlao Oil Field development through an increased working interest in SC 6B to 72.73 per cent
- Sacgasco says this farm-in is designed to increase its exposure to cashflow from the development of the proven oil within the field
- A reserves assessment is underway and expected to be completed this month before an EWT proposal is submitted to the Philippine Department of Energy
- Company shares are up 3.33 per cent to trade at 3.1 cents
Sacgasco’s (SGC) wholly-owned subsidiary Nido Petroleum Philippines has entered a farm-in agreement with the Service Contract 6B (SC 6B) Joint Venture.
Under the deal, Nido will fund and operate an Extended Well Test (EWT) and subsequent development of the Cadlao Oil Field. In exchange, Nido will increase its working interest in SC 6B by about 63.6 per cent, bringing its total interest to about 72.73 per cent.
The Cadlao Oil Field is located in offshore Northwest Palawan and previously produced 11 million barrels of oil until operations ceased in 1991 so the operator at the time could utilise the surface facilities on another asset.
According to the company, the Cadlao Oil Field within SC 6B is potentially the most attractive development target from a number of discovered oil pools within Sacgasco’s Philippines portfolio.
Sacgasco said the farm-in agreement is designed to accelerate and increase its exposure to cashflow from the development of the proven oil within the field.
“The Philippines is one of the best countries in Asia to develop oil and gas with proven, high productivity reservoirs, a proactive government and attractive fiscal terms which allow oil and gas companies to recover their investment costs quickly and efficiently, especially during EWT periods,” SGC Managing Director Gary Jeffery said.
“Tying the EWT for Cadlao into our 2022 drilling program along with Nandino will make for an exciting and potentially transformational year for Sacgasco.”
A drilling site survey and reserves assessment is underway and expected to be completed this month before an EWT proposal is submitted to the Philippine Department of Energy.
Should the EWT be approved, and depending on the field data, a full field development
may include drilling of up to four wells with a dedicated oil production facility. The company may also drill the East Cadlao prospect, which is only three kilometres away.
Company shares were up 3.33 per cent to trade at 3.1 cents at 12:10 pm AEDT.
