The Department of Energy (DOE) has approved the petroleum drilling plan that Ayala-owned firm ACE Enexor Inc. lodged for its Service Contract (SC) 55 oil and gas block straddling Northwest Palawan basin.
The company, in a disclosure to the Philippine Stock Exchange (PSE), has specified that the drilling of one well is part of the appraisal period work program it propounded for SC 55 petroleum block. The submitted work program has been earmarked a budget of US$1,702,020.
Separately, ACE Enexor noted the energy department is requiring the submission of a proposed budget for the drilling of the initial well, following the go-signal given to that activity in the block.
It was in April this year when the DOE required the Ayala firm to submit its work program and well drilling target for its prospective oil and gas discovery in offshore Palawan. Such submission, the company noted then, shall include “a firm drilling commitment of at least one well within the first two years of the appraisal period.”
The Ayala company stated its service contract’s advancement into appraisal phase was anchored on DOE’s evaluation and review that the block’s previous drilling at Hawkeye well “did encounter a significant volume of movable natural gas and is deemed to be a non-associated gas discovery.”
It was in 2015 when Palawan 55 drilled the Hawkeye-1 well up to 9,580 feet (2,920 meters) at a cost of US$23.5 million.
“The well revealed natural gas at the crest of the target structure but the estimated volume of the accumulation was deemed by the then operator to be non-commercial on a stand-alone basis,” ACE Enexor has emphasized.
Just recently, the Ayala company indicated that Palawan 55 is “undertaking quantitative interpretation of over 1,000 square kilometers of recently reprocessed 3D seismic data over the greater Hawkeye area and a large carbonate reef prospect.”
In February this year, the energy department has approved the re-assignment of the 37.5-percent interest of Australian firm Century Red Pte. Ltd. to ACE Enexor - and the latter now serves as the operator of the petroleum block.
With the re-assignment of its stake, ACE Enexor’s subsidiary Palawan 55 already held 75-percent interest in Service Contract (SC) 55. The balance of the shareholdings at 25-percent is held by Pryce Gases Inc., another local company led by the Escaño group.
The Australian firm announced its exit from the oil and gas exploration project in September last year; and Ayala firm ACE Enexor had readily concurred to the divestment of that foreign partner.
SC 55 is a deep-water petroleum block covering an area of 9,880 square kilometers. It is said to be in the
middle of proven regional oil and gas channel that stretches from Borneo offshore region in the southwest; and then to offshore Palawan in the northwest. As emphasized, SC55 is not spanning across areas covered by the disputed territories in the West Philippine Sea. The block’s resource potential is anticipated to be mainly gas; and the ‘best estimate’ for prospective find could be 89 million barrels of oil equivalent.