Gas2Grid declares Aloguinsan town oil production is “worth pursuing”

CEBU, Philippines - The Australia-based Gas2Grid Limited has declared that oil production in the Malolos-1 Oil Field in Aloguinsan, Cebu is “worth pursuing.”

The company yesterday announced that production testing has gathered sufficient data to support an application for the Department of Energy to allow the company to continue under the same Service Contract 44.

Gas2Grid said it needed to establish an appropriate completion technology for sustained production and full appraisal and development of the oil field.

“We are encouraged by the well test data and oil production, which when combined with all available technical data, supports the previous determination that the Malolos Oil Field has a ‘best estimate’ (2C) of  20.4 million barrels ‘contingent resource’ of oil in place and a “low estimate” (1C) of 6.8 million barrels with a “high estimate” (3C) of 68.1 million barrels,” said Gas2Grid Limited managing director Dennis Morton, in a statement.

“This is a resource well  worth pursuing,” he added.

The company also announced that testing of Malolos-1 was suspended while the company applies with the DOE for a further work period.

“The newly gathered additional technical data will assist in encouraging a farminee to fund field appraisal and development,” it said in an announcement posted in www.gas2grid.com.

Over the past few weeks, the lower and the upper oil-bearing sandstones of the oil field were successfully tested separately.

The company reported that the upper sandstone continued to produce oil, although no significant improvement in oil production rate was recorded.

It said the lower sandstone recorded a significant increase in production rates at an equivalent of over 100 barrels of oil per day, although it was also associated with a significant increase in water production indicating proximity of oil-water contact.

The company earlier declared that the Malolos-1 well has demonstrated that it can produce oil at commercial rates.

It said on several occasions that the well has previously produced the equivalent of 200 barrels of oil per day over short periods. Oil flow has been impaired when holes made on the sandstone reservoirs become blocked.

The well testing has reportedly determined that the two objective sandstones are oil bearing, established an oil-water contact for the lower oil sandstone indicating a minimum 500 meter vertical oil accumulation and established that oil production rates are impeded by fines migration and sand production.

On March this year, the DOE issued a written approval for the company to commence the Malolos-1 extended oil production.

This testing is being carried out to confirm the commerciality of the Malolos Oil Field.

The DOE had previously extended Service Contract 44 for a 12-month period starting on January 29, 2014 in order to conduct the tests.—(FREEMAN)