Trans-Asia signs farm-in deal for SC 6 in Northeast Palawan

MANILA, Philippines -  Trans-Asia Oil and Energy Development Corp. (TA Oil), the energy resource development arm of the Phinma Group, has signed farm-in agreements with a group of Filipino and Australian investors for Service Contract 6 in Northwest Palawan.

In a disclosure to the Philippine Stock Exchange, TA Oil said Australian firms Peak Oil and Gas Philippines Ltd. and Blade Petroleum Philippines Ltd., and local company VenturOil Philippines Inc. exercised their option to acquire 70 percent of the aggregate participating interests of the farm-out parties (92.188 percent) in SC 6 Block B.

Under the farm-in agreement, the investors agreed to participate in the work program for SC 6-B.

“Peak, et al, shall free-carry farm-out parties in all forward work programs and expenditures until first oil production,” TA Oil said.

However, TA Oil said “the assignment of interests is subject to the approval of the Department of Energy (DOE).”

TA Oil currently has a 14.063 percent participating interest in SC 6-B.

SC 6 or the Cadlao prospect was discovered in the 1970s.

The field was flowing close to 1,000 barrels of light crude oil (46oAPI) per day in 1991 when production was suspended to allow the transfer of its dedicated floating production facility to another field.

In SC 6-B, TA Oil and most of the consortium members earlier executed an option agreement with Blade Petroleum and VenturOil BVI granting the two companies the right to conduct at their sole cost three-to six-month exclusive due diligence on the area and the option to acquire 70 percent interest in the block.

Meanwhile, TA Oil is also developing SC 6-A, which is covered by a farm-in agreement with Vitol GPC Investments S.A. of Switzerland.

Under the agreement, Vitol will undertake at its sole cost, technical evaluation of the contract area over a period of one year, after which it will decide whether to earn 70 percent participating interest in the block or not.

If Vitol decides to earn such interest, Vitol will carry the original consortium members in the cost of one or two wells, and in the first phase of the first development in the block.

Technical evaluation of the area is still in progress.