PetroEnergy Resources Corp.’s (PetroEnergy) participating stake in Service Contract 14C2 (SC 14C2) in West Linapacan oil field off northwest Palawan has increased to 4.137 percent.
This developed after the Department of Energy (DOE) approved the termination of the stake of Pitkin Petroleum Plc (Pitkin) and RMA West Linapacan Pte Ltd (RMA) in Block C2 of Service Contract 14.
At the same time, the DOE approved the re-assignment of the 58.29 percent participating interest previously farmed out by the SC 14C2 Farmors to Pitkin in May 2008.
Pitkin then farmed out 29.14 percent of the interest and the operatorship of the service contract in 2011 to RMA.
The DOE reverted the farm-in agreement to a consortium composed of Filipino and Australian companies.
In a letter released on March 27, the DOE informed RMA that because of its failure to complete its financial requirements for its committed work obligation to the department, RMA’s and Pitkin’s participating interests were now re- assigned back to the Filipino Farmors.
With the exit of RMA and Pitkin from West Linapacan, the remaining members of the SC14C2 consortium are: PetroEnergy, Farmors Cosco Capital Incorporated Philippines, Forum Energy Philippines Corporation, Linapacan Oil Gas & Power Corporation, Oriental Petroleum and Minerals Corporation, Phoenix Gas & Oil Exploration Corporation and The Philodrill Corporation, as well as Perth-based Nido Petroleum Limited.
Because of this, PetroEnergy’s stake in SC 14C2 now stands at 4.137 percent.
Prior to the re-assignment, PetroEnergy’s interest in the service contract stood at 1.03 percent and it was carried free of all exploration costs leading to the drilling of two exploration wells up to first commercial oil.
Nido, on the other hand, said it was not a party to these farm-in agreements and Nido’s existing 22.27 percent participating interest in the project is therefore not altered by the termination notices.
“Nido remains committed to progressing a West-Linapacan redevelopment project,” the company said.
Nido earlier bared plans to redevelop the West Linapacan oil field with production planned by the third quarter of 2015.
The company earlier estimated that redeveloping the West Linapacan oil field would cost around $100 million.
An independent assessment by Gaffney Cline and Associates showed that the West Linapacan field had a potential ranging from 11.6 million stock tank barrels (mmstb) to 22.8 mmstb.
The oil field has produced 8.5 million barrels from 1992 to early 1996 before it was shut-in.
West Linapacan A was discovered in 1990 and later reached a peak production rate of over 18,000 barrels of oil per day (bopd).
West Linapacan B, meanwhile, was discovered in 1993 and tests from the single well drilled on the structure flowed close to 2,900 bopd but it was never developed.