Nido Drills Successful Pilot Well on Galoc

Nido Petroleum Ltd. successfully drilled a pilot well on the Galoc oil field – the first one since a drilling campaign there in the 1980s. Planned as a drill-and-abandon well, the purpose of the pilot well was to obtain additional information on the reservoir in the southern part of the field and to optimise the Galoc 3 trajectory.

The pilot well recovered 37.8 meters of reservoir rock core before being cemented. The top of the hole was reused to drill the Galoc 4 horizontal production well.

Testing is ongoing on the core, but preliminary results confirm the presence of oil in the reservoir, more productive reservoir rock than non-productive, and a 13-19% porosity. Wireline logs verify the depth of the subsurface structure at 2,180 meters below sea level. Additionally, five fluid samples have been collected to confirm the presence and type of oil in the reservoir rock.

"Confirmation of oil in place has validated our positive view of the Galoc development, and the analysis to date is consistent with the Gaffney, Cline and Associates reserves certification," said Joanne Williams, deputy managing director. "The pilot hole has achieved all of our data gathering objectives, and our subsurface team is gratified that it has confirmed our predevelopment studies."

Project costs have increased U.S. $4 million (net share), and first oil from Galoc is expected in March 2008. The Galoc 3 horizontal well is currently in progress, and the installation of subsea trees is to follow.

Discovered in 1981 in SC14 Block C offshore the Philippines, the Galoc oil field is located in 290 meters of water. The estimated initial production rate for the well is 17,500 bo/d. Nido holds 22.28% working interest in the field.