Gindara Confirmed as Nido's First Exploration Well

Nido Petroleum Limited (Nido), on behalf of Joint Venture partner Kairiki Energy Limited (Kairiki), announced the selection of the Gindara Prospect (formerly named Coron North) as the first exploration well to be drilled by the Joint Venture in Service Contract 54 (SC 54), located offshore NW Palawan Basin, Philippines.

Jon Pattillo, Nido's Head of Exploration, commented, "The Gindara Prospect is the first drill-ready prospect to emerge from the high quality Abukay 3D seismic data. Through our joint work with Kairiki, we have now assessed all the major technical risks critical for exploration success, confirming Gindara as a high value investment opportunity worthy of drilling as the first prospect in SC 54."

"We are currently working to secure a suitable rig to drill the Gindara Prospect, and this will determine the final timing of the drilling. The global rig market is exceptionally tight at the present time, however, I am looking forward to confirming the well timing when the SC 54 Joint Venture has finalised a rig contract."

Following a detailed technical review of the Abukay 3D seismic data acquired in late 2006, the Gindara Prospect has been matured into a large, robust, four-way dip closed structure with a maximum areal extent of 11 km2 and a closure height of up to 210 metres. In line with previous reports based on the preliminary review of the data, Gindara has the capacity to accommodate in excess of 478 million barrels of oil in place, assuming the structure is filled to spill.

The Abukay 3D seismic data has dramatically enhanced the Joint Venture's understanding of the petroleum system within and adjacent to SC 54, significantly reducing the geological risk on the prospect and resulting in an outstanding drilling opportunity which has the potential to deliver a significant oil discovery.

High quality Nido Limestone carbonate reservoirs are expected at the Gindara-1 well location based on an equivalent section encountered in the Coron-1 well 6 km to the south of the Gindara structure. The Coron-1 well encountered a 150m gross reservoir section with a net to gross of 89% and an average porosity of 23%, which is amongst the best quality reservoir observed in the basin. Subsurface analysis has alsoconfirmed that the Gindara Prospect is linked to the same hydrocarbon source kitchen as the giant Malampaya field located 25 kms to the north east of the Gindara Prospect.

Importantly, the Abukay 3D interpretation has lead to a critical understanding of the reasons for failure of the Coron-1 well. Although the well encountered minor oil and gas shows in the Nido Limestone section, it was located on the basis of 1993 vintage 2D seismic coverage. Detailed analysis of the 3D seismic data now confirms at best a small residual closure at the Coron-1 location; the most likely reason why the well was dry. Additionally, the Coron-1 well appears to be shielded from the main source rock kitchen by the large, more optimally located Gindara structure, providing further corroboration for the Coron-1 well being dry.