WilBoss to Arrive, Drill 2 Wells Offshore Palawan Island in September

Nido Petroleum Ltd. and its Joint Venture partner, Kairiki Energy Ltd., are pleased to announce that the arrival of the WilBoss drilling rig has been accelerated to early September 2008. The WilBoss will drill two wells in Service Contract 54 (SC54), which is located in the Northwest Palawan Basin, offshore the Palawan Island in the Philippines.

  • WilBoss rig on-hire early September for approx 2 month program for 2 wells.
  • Yakal-1 and Tindalo-1 will be drilled in the northeastern quadrant of SC54.
  • Oil in place potential of up to 18 million barrels combined.
  • 5 km away and on-trend from currently producing oil fields Nido A & Nido B.
  • Over 50% historical success rate in the basin for this "Nido Pinnacle" play type.
  • First exploration drilling for over a decade and the first on 3D seismic in the Palawan.

Nido's Deputy Managing Director, Joanne Williams remarked, "I am excited to embark upon our first Nido-operated drilling program earlier than expected and the WilBoss is a great piece of kit to do the job. Operational readiness is high with the full mobilization of the drilling team to manage the drilling execution in Manila and the seabed and soil surveys successfully completed last week. I wish to sincerely thank the Philippines Department of Energy and our Joint Venture partner Kairiki for their wholehearted support of the program so far."

Williams continued, "These wells, Yakal-1 and Tindalo-1, represent opportunities with a very high chance of success, being on the same structural trend as Nido A & Nido B producing fields as well as the Nido-1 & Nido-1X1 wells which both flowed oil to surface when tested in the 1970s. With luck, success at Yakal and Tindalo may just be the start. Whilst the individual size of each of the low-risk opportunities in this area is relatively modest, there is substantial tie-back potential once production facilities are established with 20+ targets in the remaining inventory."

Nido Pinnacle Play Type

The Nido Pinnacle play type has been extremely successful in the northern party of the Palawan Continental Shelf, in a trend extending from SC 54 in the south to the Matinloc fields over some 60 kilometers to the north. The Nido Pinnacle reservoirs are early Miocene limestone, pinnacle reef build-ups (schematically shown below) where matrix porosity and permeability is significantly enhanced by the presence of vugs and natural fractures, making them excellent production targets.

Of the 18 wildcat wells drilled on 2D seismic targeting Nido Pinnacles within this trend, at least 12 have been oil discoveries. While five of the six dry holes failed due to missing robust structural closure. With 3D data to properly guide optimal well location, these failures may have been avoided. Oil in Place (OIP) ranges up to 50 million barrels in the 12 discovered pools, two of the largest being Nido A and Nido B fields, which, to date, have both produced approximately 50% of their in place volumes.

Yakal and Tindalo

A detailed review of the Western-Geco TQ3D and Signal Head 3D surveys in SC54 delivered a broad suite of more than 20 prospects and leads (most being pinnacle reefs) with potential oil in place ranging from 2-20 million barrels each.

The Yakal and Tindalo drilling targets have been high-graded from this inventory for the first drilling program in this area. They are both robust Nido Limestone pinnacle reef structures on the same structural trend and analogous to the currently producing Nido A and Nido B oil fields in Service Contract 14A just five kilometers away. The seismic cross section below illustrates the similarity and proximity of the Yakal and Tindalo prospects to the producing field analogues.

While Yakal and Tindalo are relatively small in areal extent, these structures each have significant vertical closure and together they have the capacity to accommodate up to 18 million barrels of oil in place. If successful these reservoirs are expected to be highly productive based on the analogous Nido A & B fields.

Planning for Success

With success at Yakal and Tindalo, it is cost-effective to test the long-term productivity of the wells with a small production facility rather than a conventional Drill Stem Test using the WilBoss. Such an extended well test has the benefit of being able to recover the oil produced for sale, especially since Tindalo and Yakal are only four kilometers apart and may be easily tied-back into the same facility.

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