Nido Petroleum raises A$11 M for Galoc expansion

MANILA, Philippines - Australia’s Nido Petroleum Ltd., the project operator of the Galoc oil field in Northwest Palawan, has raised more than A$11 million through a private share sale.

The fresh capital will allow the company to partially fund the $188-million expansion of the Galoc project and explore adjacent areas.

In a disclosure to the Australian bourse, Nido Petroleum said “it has completed a successful placement of approximately 430 million fully-paid ordinary shares to sophisticated and professional investors at A$0.027 per share to raise total proceeds of just over A$11.6 million.”

The shares were sold at a 10-percent discount compared with the closing price on Nov. 23, with Canaccord Genuity (Australia) Ltd. acting as the lead arranger.

Nido Petroleum said the equity placement was split into unconditional and conditional tranches of approximately A$5.6 million and A$6.0 million, respectively.

Settlement of the unconditional placement is scheduled next week while the conditional placement is up for shareholder approval in January.

The finalization of the capital raising “will ensure that the company is fully funded for the Galoc Phase 2 development [and] drilling of the Galoc North near-field exploration prospect.”

The Galoc project is one of only two regularly-producing oil fields in the country.

In September, the consortium behind Galoc finalized a decision to pursue a $188-million expansion. Galoc Phase 2 targets to more than double the output to 12,000 barrels of oil per day (bopd) from 5,600 bopd.

Nido Petroleum will also use part of the proceeds for the engineering and design, and pre-final investment decision work program of the West Linapacan field in Northwest Palawan.

Nido Petroleum, which holds a 22.88-percent share in the Galoc oil field or Service Contract (SC) 14 Block C1, earlier said it will spend $43 million as an equity portion for the expansion.

Remaining recoverable volumes of the Galoc oil field is estimated at 8.9 million barrels on a proven basis and 13.4 million barrels on a proven and probable basis, up 156 percent and 134 percent, respectively, from previous data.

Galoc lies within SC 14 some 60 kilometers offshore of Palawan. The Galoc reservoir lies 2,200 meters below the sea floor, with its first production on Oct. 9, 2008.

Specifically, the Phase 2 development includes the drilling of two subsea wells, tied back to the existing floating production, storage and offloading (FPSO) facility.

Galoc’s operations stopped in December as the project operator installed the FPSO. It resumed production in April.