Aussie firm to start $8-M oil exploratory drilling in Cebu

NorAsian Energy Ltd. (NEL), a subsidiary of Otto Energy of Australia, will start drilling activities at Service Contract 51 in South Cebu, a ranking company official said.

NEL exploration manager Dennis Panganiban said they would spend around $8 million for the drilling of an exploratory well in the area.

The drilling, he said, would be done with partners such as TransAsia Oil and Gas Exploration, Alcorn Gold and PetroEnergy.

"We have committed to drill there by next year, as we have just finished the first sub-phase and our Villaba engineering study, which we hope to complete prior to our commitment to enter into the next sub-phase. We definitely have an exploratory well when we enter into the next sub-phase, which could cost between $6 million and $8 million," Panganiban said.

NEL chairman Rufino Bomasang, for his part, said they have yet to set the date from the drilling activitiy. "We have yet to firm up when, but it will definitely be sometime next year."

Bomasang said they are optimistic they could get a sizeable amount of oil in the drilling area.

"The recoverable reserves we are looking at are anywhere between five and six million barrels, but the oil in place is around 16 million barrels," he said.

SC 51 consists of two sub-blocks over the East Visayan Basin.

NEL said an engineering study had been conducted on the Villaba gas discovery well located in the northern block of SC 51.

The study will determine the deliverability of gas from the Villaba reef.

It said additional geophysical mapping had been carried out on 250 kilometer of seismic data, which is currently being reprocessed to identify additional gas resource potential in three satellite reef structures in the immediate vicinity of the Villaba gas discovery.