Gas2Grid Limited reported Wednesday that it has lodged with the Philippine Department of Energy (DOE), under the terms and conditions of the Service Contract (SC), an application to declare Malolos-1, which is located in SC44 onshore Cebu, Philippines an oil discovery.
Gas2Grid Limited successfully perforated and flow tested two oil bearing sandstones in Malolos-1 at depths of 7,280–7,308 feet (2,219–2,227.5 meters) and 7,152–7,207 feet (2,178–2,195.4 meters). Oil was produced on short term test at indicative production rates of between 100 to 200 barrels of oil per day (bopd). Oil from the lower sandstone also flowed to just below surface. These results have now been integrated with all other available technical data and we consider Malolos-1 is an oil discovery.
The two oil bearing sandstones that have tested oil are located within the eastern limb of the Malolos anticline where they are steeply dipping (60 degree). Previously drilled wells, Malolos-1 and Malolos-4, recorded oil bearing sandstones over a 1,627 foot (496 meter) vertical interval. The recent oil test production rates (between 100–200 bopd) confirm Malolos-1 as an oil discovery well. We are confident that further testing of Malolos-1 will result in commercial oil production from a much larger Malolos oil field than currently assessed.
Initial assessment of the oil volume potential within the Malolos oil field is a “Contingent Resource” oil in place in the two oil productive sandstones in the range of between a “Low Estimate” (1C) of 4 million barrels and a “High Estimate” (3C) of 42 million barrels, with a “Best Estimate” (2C) of 12 million barrels of “Total Oil Initially in Place."
A technical summary of all observations, measurements and testing in Malolos-1 follows:
Work Program and Budget
The two oil bearing sandstones were recently production tested for only short periods of time and whilst both showed commercial productive capacity, they will need to be tested for a longer period in order to establish commerciality. In order to complete a longer term testing a beam pump and oil storage will be required onsite. Planning is underway to recommence testing when requisite government approvals have been obtained and equipment delivered to site. The estimated cost of this work is $500,000-$1 million.
The extended production test will involve individually placing each of the two oil bearing sandstones on extended pump test for a minimum period of three weeks each (production time may be extended based on results). The production period will be followed by a longer shut-in period to assess the reservoir pressure build-up, the results from which will enable determination of reservoir quality and better assessment of relative size of the oil reservoir.
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