Aussie firm to launch $10-M oil search venture in Mindanao

Australian oil and gas exploration firm Tap Oil Ltd. will spend about $10 million (P480 million) for the development of Service Contract (SC) 41 in Sandakan Basin in Mindanao, a top company official said.

Paul Underwood, the company’s managing director, said they are actively pursuing opportunities in Southeast Asia.

"We are scheduled to start a $10-million seismic acquisition program in SC 41 toward the end of this month designed to assist in maturing prospects for drilling in this area in 2008," he said. 

He added that they will continue to pour in capital into their Philippine exploration business. "Our activities in the Philippines are an important part of the company’s forward strategy."

Tap Oil has entered into a farm-out agreement with Salamander Energy Plc. for SC 41. Under the deal, Salamander will earn a 35-percent interest in SC 41 by contributing to the forward work program while Tap Oil will retain a 50-percent interest and control of operations. 

In addition, the SC 41 joint venture has agreed to increase the size of the 2007 3D seismic survey from 300 kilometers to a minimum of 600 kms. 

SC 41 is an area of approximately 4,820 square kilometers with water depths ranging from 200 to 2,000 meters.

Tap Oil said SC 41 attracted considerable interest by other major companies and demonstrates the prospectivity of the acreage. 

The farm-out is consistent with Tap Oil’s strategy of acquiring larger equity interests and where possible retaining operatorship. Salamander’s entry is expected to enhance the capabilities of the joint venture in progressing drillable prospects based on the 3D seismic survey starting this month. 

The doubling of the size of the 3D seismic survey will dramatically enhance the prospectivity of SC 41 by enabling multiple drilling targets to be matured.