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Assets & Strategy: Philippines: Galoc Oil Field.old20061213

The Galoc field is situated in Block C of Service Contract 14 (SC14), in the North West Palawan Basin, offshore Philippines. The field is located around 70 km west of Culion Island in a water depth of approximately 320 metres. The reservoir depth is at 2,100-2,220 metres. The Galoc structure has a 57+ metre gross oil column consisting of early Miocene turbiditic sandstone with 16% average reservoir porosity.

The Galoc field was discovered with the drilling of the Galoc-1 exploration well spudded in April 1981, operated by Philipines Cities Service Company (PCSI). A conventional drillstem test (DST) was conducted over 3 intervals with a combined rate of 5,218 stb/d. The maximum test rate was 1,828 stb/d; producing 35° API crude with a GOR of 609 scf/stb from an 8 metre interval.

Galoc-2 was drilled by Occidental Petroleum Company in 1983 to test the northern extension of the Galoc structure, 2.1 km NNE of Galoc-1. The well encountered the Galoc Clastic Unit 60 metres high to Galoc-1. The lower sand units were hydrocarbon bearing however the reservoir quality was poorer and the section thinner. A 7.6 metres interval tested and produced at a rate of 1,767 stb/d reducing to 1,328 stb/d (average 1,504 stb/d.) DST #2 on the upper sand produced 1,222 stb/d of condensate and 10.5 MMscf/d of gas.

Galoc-2ST (sidetrack) was drilled towards the south-east with the intention to intersect sands similar to those from Galoc-1. However the reservoir was not as well developed as at Galoc-1. The well tested at a maximum oil rate of 724 stb/d.

In February 1988, Galoc-1 was re-entered and an Extended Well Test (DST) was carried out to obtain further appraisal information. This test was conducted over a 106 day period and produced 385,000 bbl with a peak rate of 4,400 bopd.

A horizontal well, Galoc-1A, was drilled in 1989 from the Galoc-1 with a 792 metre horizontal section oriented to the south-east. The well was tested and produced at a peak rate of 3,000 bopd. This was a lower rate than the nearby vertical well and is interpreted to have been the result of near wellbore formation damage caused during drilling.

Nido acquired 17.500% of the Galoc field in September 1996 when SOCDET (Nido's predecessor) farmed into the SC14 area. In July 2004 Nido increased it's share of Galoc to 22.279% when the then operator, Altisima Energy Inc., sold its stake in the SC14 area to the other Joint Venture Participants.

In September 2004 a farm-in agreement was executed by the SC14 Joint Venture partners with a consortium comprising Cape Energy Pty Ltd (Cape) of Perth and Team Oil Limited (Team) of the UK. Following the expiration of an exclusivity period, the Cape-Team consortium introduced a third party, Vitol Holding SARL, to the SC14 Joint Venture in early May 2005 and the farm-in was finalised in July 2005. A joint operating company for the Galoc field development (Galoc Production Company) was established by the Vitol-Cape-Team consortium.

Under the terms of the farm-in proposal, Nido will retain its 22.279% direct interest in the Galoc project. Nido's 22.279% of the development costs will be funded by a combination of equity and debt. The equity requirement has been met by the recent capital raising and the project debt funding negotiations are currently underway.

Nido has made an important technical contribution to the understanding of Galoc field. Our activities have included a review of key technical and economic aspects of the Galoc development project including the geological and geophysical field model, reservoir simulation analysis, economic modelling and a reassessment of the field development strategy. This work will now be carried forward by the Galoc Production Company in its capacity as operator of the field.

First oil production from the field is expected between late-2006 and early-2007.

Nido currently holds a working interest of 22.279% in the Galoc field.

 

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