MANILA, Philippines - Upstream oil firm Frontier Oil Corp. (FOC) is acquiring a majority stake in an oil and gas field in Eastern Visayas.
Listed firms Trans-Asia Oil and Energy Development Corp., PetroEnergy Resources Corp. and Alcorn Gold Resources Corp. disclosed that they signed a farm-in option agreement with Frontier Oil covering the Cebu Strait of Service Contract (SC) 51, also known as South Block.
“Under the agreement, Frontier has the option to acquire 80 percent of the farmors’ combined participating interests in the South Block,” the oil firms said.
Specifically, Frontier will have to shoulder the drilling works in the offshore Argao-1 exploratory well.
This forms part of the committed sixth exploration period of January 2014 to July 2015.
“Frontier may exercise the option no later than Dec. 15, 2012,” the oil firms said.
Trans-Asia, PetroEnergy and Alcorn Gold holds almost all shares in SC 51.
To date, Trans-Asia and PetroEnergy owns 33.34-percent and 20.06-percent share in South Block, respectively. Shares of Alcorn Gold, for its part, will be diluted to 9.32 percent from 46.6 percent.
In August, Frontier announced it is finalizing its plan to raise up to $50 million through an initial public offering in the local bourse.
Frontier already secured shareholder approval to buy all shares in Australian oil exploration firm Frontier Gas Pty. Ltd. as part of its acquisition of oil and gas projects prior to public listing.
Frontier holds a 50-percent interest in SC 52, an onshore oil and gas block located in the Cagayan Valley. It is also the project’s operator.
The Department of Energy is pursuing energy independence and sustainability through the development of indigenous energy resources like coal, petroleum and natural gas.
To date, there are 27 SCs in the Philippines involving Shell Philippines Exploration B.V. and Nido Petroleum. However, only the Malampaya and Galoc oil fields are in regular production.