INDEPENDENT oil and gas company Dragon Oil plans to withdraw from Service Contract 63 (SC 63) in North-West Palawan basin.
In its quarterly report, Australia’s Nido Petroleum Ltd. said Dragon Oil has expressed its intention to withdraw from the oil exploration project.
Nido Petroleum said the move by Dragon Oil is subject to government approval. It did not reveal the reason behind the move.
“Dragon Oil gave notice of its intention to withdraw from SC 63, subject to government approval,” Nido Petroleum said.
Dragon Oil signed a farm-in agreement with Nido Petroleum in January 2014, covering SC63.
Under the deal, Dragon Oil would reimburse Nido $2.18 million for past seismic costs and pay 56 percent of the costs of drilling the Baragatan-1 well to earn a 40 percent participating interest.
SC 63 covers 10,560 km² and is currently in midst of an exploration program which involves drill ing one well.
On July 6, 2014, Nido reported that drilling at the Baragatan-1A well reached 2,681 meters deep. The drilling data indicated the reservoir units contain low gas saturations which did not warrant further evaluation or testing.
The Baragatan-1A well has been plugged and abandoned.
The partners have requested a one-year extension of the license to operate until November 2015 in order to be able to integrate the data from the well into a revised geological model.
Nido said the government-owned PNOC-EC was continuing the subsurface studies after Baragatan-1A was drilled.
“Nido and PNOC-EC are presently reviewing the forward strategy for the block ahead of a decision whether to enter the next 12-month sub-phase which commences on November 24 and carries a two well commitment,” Nido said.