Nido Petroleum discovers oil and gas northwest of Palawan

The consortium headed by the Australian-based Nido Petroleum Philippines Ltd., has discovered oil in the Yakal-1 Well, in the Northwest Palawan basin.

Energy Secretary Angelo Reyes made the announcement but he stressed that there are no other details yet since Nido Petroleum Philippines and its partner Yilgarn Petroleum Philippines Ltd., are still completing their drilling operations.

According to the Energy chief, the drilling started last September 8 and after reaching the well’s depth of 1,969.5 meters last September 20, oil was discovered.

Moreover, Reyes said that geological data gathered from the underlying limestone reservoir also confirmed the presence of an oil column of about 66 meters in the Nido reservoir from the depths of 1,733 to 1,839 meters.

“The consortium is still evaluating the oil bearing section to determine the extent of the oil column below 1,839 meters,” he added.

However, Reyes said after the evaluation expected to be completed this week, Nido and Yilgarn will stop their operations in the Yakal-1 Well and move the rig to a new drilling site-to be called the Tindalo-1, located about 5 kilometers northwest of Yakal-1.

SC54 is located adjacent to the southern end of Nido’s existing SC14 and SC6B licenses and is on trend with Shell’s 600 million BOE Malampaya producing gas field. It covers some 537,616 hectares in this proven hydrocarbon basin.

In March 2006, Nido accepted a farm-in offer from Perth-based Yilgarn Gold Limited (Yilgarn) to farm in to the SC54 acreage.

Under the farm-in terms, Yilgarn will earn a total 40-percent working interest in the SC54 contract area upon the completion of two stages.

Following the technical evaluation of the seismic data, Yilgarn is required to fund the drilling of a well on a 2:1 promote basis as the second stage to earn its 40-percent working interest. This is based on estimated costs of US$ 15 million for the well. (PNA) – ?