Partners Nearer to Further Development of Galoc Oil Field Offshore Palawan

A summary of the range of in-place oil volumes for the mid-Galoc area (MGA) based on the sensitivity modelling performed by GPC and subsequent GCA modifications is shown below.

• Mid-Galoc Area (STOIIP in MMstb)
  • P90: 52.6
  • P50: 77.3
  • P10: 113.0

GCA concluded its work with a review of the main Galoc Field production history, and GPC’s latest simulation model forecasts and history-matching results. These were used as a basis for generating the production profiles that formed the basis of GCA’s resource estimates.

Oil production was assumed to start on Jan. 1, 2018. An uncertainty range in initial per well oil rate between 2,500 stock tank barrel per day (stb/d) and 3,000 stb/d, attributable to variable reservoir performance, was assumed. Production decline rates in the range of 19 percent to 23 percent per year were applied, consistent with the well performance observed in the Galoc Phase I development wells.

The estimates of recoverable volumes for the mid-Galoc development were based on a two well development and assuming an economic limit of 1,200 stb/d for the field. Recovery factors range between 12 percent and 13 percent and are typical of reservoir performance under a pressure depletion mechanism.

GCA has considered production forecasts based on the Operator’s preliminary development plan to be classified as Contingent Resources under the sub-category ‘Development Pending’.

Contingent Resources estimated by GCA and attributable to Nido’s Net Working Interest (NWI) in the Service Contract as at June 30 are tabulated below. Nido’s Net Entitlement volumes from an approved development plan (which would then be classified as Reserves) will be less than the NWI volumes shown therein.

• Oil Contingent Resources in Mid-Galoc Area (Development Pending) 
  • Gross 100 Percent Field (MMstb)
    • 1C: 6.2
    • 2C: 9.5
    • 3C: 14.6
  • Net to Nido's NWI (MMstb)
    • 1C: 3.4
    • 2C: 5.3
    • 3C: 8.1

It must be appreciated that the Contingent Resources reported herein are unrisked in terms of economic uncertainty and commerciality. There is no certainty that it will be commercially viable to produce any portion of the Contingent Resources.