Phinma Petroleum raising stake in SC 55 West Palawan

MANILA, Philippines — Phinma Petroleum and Geothermal Inc. (PPGI) is taking a bigger stake in Service Contract (SC) 55 offshore West Palawan after one of its partners withdrew from the project.

The company, however, is looking for new partners to commence drilling in the gas prospect.

In a disclosure to the Philippine Stock Exchange yesterday, PPGI said Australian firm Century Red Pte. Ltd. is effectively withdrawing as co-contractor in SC 55.

Century Red issued a deed of assignment, transferring its 37.5 percent interest in SC 55 to Palawan55 Exploration and Production Corp.

PPGI – to be renamed AC Enexor Inc. – owns 75 percent of Palawan55 while Phinma Energy Corp. – which will be renamed AC Energy Philippines Inc. – owns 25 percent of the company.

The assignment is subject to the approval of the Department of Energy (DOE).

“Upon DOE’s approval of the assignment, the participating interest of Palawan55 in SC 55 shall increase to 75 percent,” PPGI said.

The other partner to SC 55 is Pryce Gases Inc., which owns the remaining 25 percent.

But even prior to the withdrawal of Century Red, PPGI president and chief executive officer Eric Francia said the consortium would search for strategic partners for the drilling of new wells in the prospect which is estimated to cost $30 million to $40 million.

The company is set on completing resource assessment and quantitative interpretation of the 3D data before advancing talks with potential partners.

“Right now, we’re trying to complete the studies hopefully within the year. On that basis, that will give us the potential target, resource, and on that basis, we’ll look for the right partners,” he said.

“We’ll start firming up our partnership plans towards the end of the year,” Francia said.

Starting Aug.26, the SC 55 consortium entered Sub-phase 5 of the gas prospect where it has committed to drill a deepwater well in the second quarter of 2020 in a bid to bump up the country’s indigenous oil resources.

“We committed to drill one well within two years of the appraisal period and additional re-interpretation of the seismic data,” PPGI executive vice president and chief operating officer Raymundo Reyes said.

In August 2015, the SC 55 consortium drilled the Hawkeye-1 well in 1,700 meters of water at a cost of $23.5 million.

The well discovered natural gas at the crest of the target structure, but the estimated volume of the accumulation was deemed by the former operator, Australia-based Otto Energy Ltd. through Otto Energy Philippines Inc., to be non-commercial on a stand-alone basis.

This drove Otto Energy to withdraw from the project in November 2016. The Australian firm had a 68.18 percent participating interest in SC 55 which it assigned to the remaining joint venture partners Palawan55, Century Red, and PGI.