Nido Acquires Additional Stake in Northwest Palawan Basin

Nido is pleased to confirm that documentation to acquire additional interests in SC-14 and SC-6B in the Northwest Palawan Basin, Philippines has been signed and assignments of these interests to Nido will now take place.

As previously announced Nido is acquiring these interests from Vaalco Energy to facilitate ramping up production at the Nido Fields. Nido is particularly optimistic about the Nido-B Field where it believes there is some 2 million barrels of oil capable of being recovered over and above the existing estimates of production.

The next step in the process is to introduce an operating company who will fund production enhancement operations. Negotiations are underway to farm out part of the equity acquired from Vaalco to an operating company. It is expected that an agreement will be finalised in the next few weeks.

Nido and its JV partners are continuing to negotiate documentation with another party in relation to developing the Galoc Field in SC-14.

Service Contracts 14 and 6B have been the main oil producing area in the Philippines, and between them have produced over 50 million barrels of oil. Production is still continuing from the Nido, Matinloc and Pandan fields. The contract blocks lie between SC 42 in the east and SC 38in the west where Shell operates the Malampaya Gasfield.

SC 14 is divided into four blocks (A, B, C & D). Block A is situated within the southern portion of SC 42 and includes the Nido Oilfields, which are serviced by two production platforms and one processing platform. Block B/D contains the Matinloc, Pandan and Libro oil fields with 3 platforms. Block C contains the West Linapacan A and B and the Galoc Fields.