Nido Petroleum set to drill Gindara prospect in May

MANILA, Philippines - Australia-based oil exploration firm said Nido Petroleum Philippines Ltd., is set to drill its Gindara prospect off Palawan in May this year after firming up the services of a Malaysian oil rig company.

In a report, Nido head of exploration Jon Pattillo said the deepwater rig Atwood Falcon was contracted to drill Gindara-1, with an upside potential of one billion barrels unrisked oil in place.

Pattillo said the successful contracting of rig indicates drilling will commence, as planned, in May 2011.

“On behalf of the Service Contract (SC) 54B joint venture, Nido is pleased to announce that the Atwood Falcon deepwater semi-submersible drilling rig has been successfully contracted to drill the Gindara-1 prospect,” he said.

The drilling rig will explore the Gindara-1 prospect under a rig assignment agreement between Sarawak Shell Bhd / Sabah Shell Petroleum Co Ltd. and Nido, which is operating the well on behalf of the SC 54B consortium.

The rig is anticipated to mobilize from Labuan, Malaysia to the Gindara-1 location in the Philippines during the first or second week of May 2011.

The Nido official said this will follow planned maintenance work on the blowout preventers.

“Nido is pleased to have secured the Atwood Falcon for the Gindara-1 project and thanks its partner, Shell Philippines Exploration B.V. (Spex), for facilitating access to the rig from within the Shell organization. The rig is well suited to operate offshore Philippines, having drilled two deepwater wells last year for Shell in the Philippines,” he said.

Nido Philippines president and CEO Jocot de Dios said Gindara-1 is the first well to be drilled in the block by the SC 54B joint venture and is also the first well in Nido’s planned five well program.

“More importantly, the successful contracting of the Atwood Falcon underpins our confidence that drilling will commence, as planned, in May 2011,” De Dios said.

SC 54B is owned by Nido, 33 percent (operator), Kairiki Energy Ltd. (formerly Yilgarn Petroleum), 22 percent and Spex, 45 percent.

Gindara-1 is located some 50 kilometers south of the Spex-operated Malampaya gas field in Malampaya, the largest discovery made in the Philippines to date and currently on production.

Earlier, the Nido executive said the farm-in agreement will allow the SC 54B partners to quickly drill the Gindara prospect targeted from March to May.

Based on the deal, Spex will contribute 75 percent of the Gindara-1 exploration well cost up to a maximum well cost of $24 million; pay $2.5 million towards past seismic costs; and pay its pro-rata share of the 2010 and 2011 work program and budget from the date of signing.