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By Euan Paulo C. Añonuevo Reporter
UNITED Kingdom-based Forum Energy
Plc. has signed an agreement for the sale of a third of its stake in
its oil and gas prospect off the coast of Palawan to Monte Oro
Resources & Energy, Inc.
In a statement, Forum Energy said
that under the deal struck with Monte Oro, the latter will acquire a
30-percent participating interest in its Sampaguita oil and gas
discovery in Reed Bank basin covered by geophysical survey and
exploration contract (GSEC) 101.
Monte Oro will pay Forum Energy
$1.5 million of past costs to the date of the agreement plus its
pro-rata share of costs incurred to the point of payment. Payment
will take place within six months following the award of the service
contract from the Department of Energy (DOE) or the completion of
any future farm out transaction.
The deal, however, is still
subject to the approval of the DOE which has yet to act on Forum
Energy’s application to convert GSEC 101 to a service contract.
The area covered by GSEC 101 is
the subject of a contract dispute after the Chinese government
claimed the area to be part of a tripartite deal along with the
Philippine and Vietnamese governments for joint exploration in the
Spratly’s Islands.
Earlier estimates showed that the
area can rival the production potential of the Malampaya gas field
which feeds three natural gas-fired power plants in the Philippines.
Forum Energy said that Monte Oro
will assist in obtaining all regulatory approvals for the conversion
of GSEC 101 to a service contract, which would facilitate the start
of drilling activities in the potentially world-class gas discovery.
“We are very pleased to have
signed this Agreement with Monte Oro which we are confident will
assist us in a timely conversion of the service contract,” Russell
Harvey, Forum Energy chief executive, said.
Forum Energy said that Monte
Oro’s participation in the exploration block will entitle it to
the Filipino Participation Incentive Allowance (FPIA) which equates
to 7.5 percent of gross proceeds from any future production.
“This partner brings a wealth
of local experience which will assist in developing Forum’s
business while providing welcome Philippine participation in a major
local resource,” Harvey said.
Monte Oro is a local company
engaged in mining, oil and gas and infrastructure investments. The
company holds interests in both coal, oil and gas licenses in the
Philippines.
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