Preliminary interpretation of the new seismic data in conjunction with Nido's existing seismic database has to date identified 65 structures across Nido's exploration permits in a range of play types and water depths (refer Attachment 2). Interpretation of the seismic data is ongoing and will be augmented in the third quarter of 2007 with further 3D seismic data acquisitions in SC 54 and SC 58, aimed at maturing a range of leads to prospect status for drilling from mid-2008 onward.
Service Contract 54 (Nido 60%)
Following the acquisition of 640 sq km of 3D data as part of the Abukay survey between November 2006 and January 2007 using the MV Veritas 'Viking II' vessel at a cost of US$3.5 million, onshore processing of this data commenced on the 8 January 2007 by CGGVeritas.
The preliminary Abukay 'fast-track' processed 3D seismic data has now been received by the SC 54 Joint Venture and an intense period of integrated geophysical and geological evaluation of the data set is currently underway between Nido and Joint Venture partner, Yilgarn Petroleum Philippines Pty Ltd.
Preliminary interpretation of the data has not only confirmed the presence of the pre-3D seismic leads identified in the 2004 NW Palawan Basin study conducted with BHP Billiton and Paladin, but has also enabled the definition of a number of exciting new potential targets. The improved image quality has confirmed the Coron North structure as a large robust closure at 'Top Nido' level and also the development of the complex Miocene-aged 'Princesa' turbidite play identified on the original 2D seismic data. Nido is encouraged by the preliminary results and will continue to mature these key leads over the next months, which will include the acquisition of c.180 sq km of 3D seismic data to further mature the 'Princesa' feature in July 2007.
In tandem with the 3D interpretation, a comprehensive review of the shallow water areas of SC 54 is also underway, focused on the productive Nido Limestone pinnacle reef play.
Initial interpretation has identified a number of pinnacle reef trends in the vicinity of the producing Nido oil field, which have not been optimally tested by drilling. The shallow water setting and historically high success rates of the pinnacle reef play complements the deeper water leads being matured. This will allow the development of a balanced Prospect and Lead Inventory with respect to risk and potential value within SC 54.
Service Contract 58 (Nido 50%)
Nido also completed the acquisition of 3,184 full-fold km of new 2D seismic data in SC 58 as part of the Talusi survey in late 2006 using the MV Veritas 'Voyager' vessel at a cost of US$2.6 million.
Preliminary review of the 'fast-track' processed data has confirmed the presence of an extensive deepwater fairway comprising four major play types:
The latter two Miocene plays are either draped over deeper structural closures at Nido Limestone level or involved in potential stratigraphic traps. Attachment 2 illustrates the location of the leads identified from the preliminary review of the Talusi 2D seismic data in SC 58.
Nido is encouraged by the number and diversity of plays identified in SC 58 based on our preliminary review of the new seismic data which has been clearly helped by the excellent image quality achieved by the survey. Consequently, Nido has engaged Gaffney Cline & Associates based in Singapore to assist with the initial subsurface interpretation of this data. Over the next 2 to 3 months, the key objective of this work will be to develop a SC 58 Prospect and Lead Inventory from which Nido can determine the location and volume of 3D seismic data to be acquired in SC 58 in September 2007.
Service Contract 63 (SC 63) (Nido 50%)
Preliminary technical work has commenced on the evaluation of SC 63 by Operator, PNOC Exploration Corporation (PNOC-EC). Although this work is at an early stage of development, PNOC-EC and Nido are currently discussing the opportunity to accelerate the subsurface evaluation of SC 63, which contains the Aboabo-1 gas discovery located in the southern sector of the block.
Nido's Head of Exploration, Mr Jon Pattillo, commented, "As a new member of the Nido team, I am very encouraged with the preliminary results emerging from the new seismic data acquired in SC 54 and, notably, in SC 58. These positive initial findings support the potential to develop a large, attractive Prospect and Lead Inventory containing an extensive portfolio of shallow to deep-water targets across a range of plays and risks from which a material, multi-well drilling program can be delivered across our NW Palawan assets."
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