Firm announces oil flow increase in Aloguinsan

CEBU, Philippines - Barely more than two months since its exploration, Australian firm Gas2Grid Limited has announced the increase in oil production in the Malolos-1 Oil Field in Olango, Aloguinsan, Cebu.

The company has advised that it recorded a very encouraging oil flow after unclogging blocked portions of its hole.

"The increased oil production rate indicates that the remedial work has had some success in clearing the perforations to allow an influx of oil from the reservoirs," read a statement posted via the website www.gas2grid.com.

"The Malolos-1 well has again demonstrated that it can produce oil at commercial rates," the company said.

The well has previously produced approximately 200 barrels of oil per day on several occasions but only for short periods.

Oil flow has reportedly been impaired when the holes made on the sandstone become clogged.

The company said the well will continue to be tested to establish longer term oil production rates.

"If the oil production rate declines due to down-hole blockage the company will make a decision on future operations, which might include further remedial work or suspension of test operations whilst various alternatives are considered to exploit the proven oil reservoirs," it added.

An extension of one year starting January 2014 on Service Contract 44 covering the oil exploration in southwestern Cebu was issued by the Department of Energy so Gas2Grid could continue operating the Malolos-1 Oil Field.

The company earlier reported a "contingent resource" of oil in the two well bores it made in Aloguinsan with a "low estimate" (1C) of 6.8 million barrels and a "high estimate" (3C) of 68.1 million barrels, with a "best estimate" (2C) of 20.4 million barrels of "total oil initially in place."

Gas2Grid's extended oil production testing program aims to gather sufficient technical information to confirm commercial viability of the Malolos-1 Oil Field to justify the DOE's act of awarding a 25-year production period to the company.

Gas2Grid earlier said proving commercial production at the oil field would have a very significant impact on the value of the company and would benefit the Philippine economy.  (FREEMAN)