Nido Petroleum shifts to Yakal oil field after leaving Tindalo

MANILA, Philippines –  Nido Petroleum Ltd. plans to shift focus on the development of the Yakal oil field after abandoning the Tindalo oil well in northwest Palawan.

In a regulatory report, the Australian oil and gas exploration firm said they decided to call off the jack-up rig Aquamarine Driller following the abandonment of the Tindalo well.

“This decision is without prejudice to the possible development of the Yakal field, which is an option currently being considered by the Service Contract 54A joint venture partners,” Nido said.

The Aquamarine Driller will be available for use by the SC 54A joint venture for a period of three months from the call off date.

“While the Tindalo test results have been disappointing, the joint venture will continue to assess its shallow water opportunities within its inboard (SC 54A) portfolio,” Nido president and CEO Jocot de Dios said.

In September 2008, Nido and its joint venture partners discovered oil at the Yakal-1 well. After reaching the well’s total depth of 1,969.5 meters on Sept. 20, 2008, initial findings showed the presence of gas (methane to pentane) and oil in the drill cuttings recovered to the surface.

ISIS Petroleum Consultants Pty Ltd., an independent consultant, earlier reported that Yakal-1 has a potential of up to 10.7 million barrels with a 35 percent recovery factor.

Nido Petroleum is the lead operator of SC 54A which covers the Tindalo and Yakal oil fields with a 42.4 percent stake. Its joint venture partners are Kairiki Energy Ltd (30.1 percent), TG World Energy Corp. (12.5 percent) and Trafigura Ventures III B.V. (15.1 percent).

The consortium decided to discontinue production from the Tindalo oil well late last month due to the presence of water that hampered oil production.

It said it would be “uneconomic” to continue with oil production from the Tindalo well.

According to Nido, the abandonment program for Tindalo will be completed within this month.

The Tindalo oil field was discovered in October 2008 and the joint venture decided to proceed with the well development in December 2009. The oil field is estimated to contain between 1.5 million to 9.1 million barrels with a mid-case of approximately 5.1 million barrels of oil.

Last year, Nido bared plans to implement an initial five well exploration drilling program across its Northwest Palawan acreage starting early 2011.

“The drilling program will test high potential value prospects located in SC 54B (Gindara), deepwater block SC 58 (Balyena or Butanding), SC 63 (Aboabo-2 and Kalapato) and SC 54A (Lawaan),” it said.