The Ayala-owned ACE Enexor Inc., an upstream oil and gas investment subsidiary, has announced its formal withdrawal from Service Contract (SC) 6, which is a petroleum exploration block in Northwest Palawan.
A disclosure to the Philippine Stock Exchange (PSE) stated the company will be letting go of its 7.78-percent participating interest in SC 6-Block A, which is also known as the Octon block.
While the service area does not have any commercial operations at this point, it is perceived that this portion of the country’s sedimentary basins is host to significant number of discoveries for both carbonate and clastic reservoirs.
At least eight wells have been reported drilled in SC 6, and the Octon field somehow yielded minor discoveries for oil, gas and condensate in previous exploration activities.
With its exit from SC 6, the Ayala firm made previous announcements that it will concentrate investment efforts in SC 55, which is another petroleum block in Northwest Palawan deemed to have prospects for gas discovery.
ACE Enexor already secured the go-signal of the Department of Energy (DOE) on its work program at the block, which will cover the drilling of an appraisal well that was earmarked a budget of more than $1.7 million.
The scheduled well drilling has to be carried out in the first two years of the appraisal work program that the company had submitted with the energy department.
If the drilling will yield commercially viable outcome, the Ayala company indicated that it will have to look for foreign partners with deep pockets and with extensive technical expertise for it to pursue further exploration and production (E&P) activities at the service area.
ACE Enexor emphasized it is keen on joining the country’s quest for the next Malampaya gas field, but it will devote its investment foray first in SC 55 because it holds operatorship and majority interest in that block.
The planned drilling will be a follow-through to the 2015 Hawkeye-1 well that was drilled at SC 55 in 2015, which essentially revealed potential for gas deposits, although it had not been established to be of commercial scale then.
In the re-assignment of interests at SC 55, the Ayala firm already holds 75-percent shareholdings in corporate vehicle Palawan 55; while the balance of 55-percent is with Pryce Gases Inc. of the Escaño group.