Kairiki Seeks Partner in SC 54 to Target 87MM Barrels of Oil in Place

Kairiki has announced the results of its preliminary evaluation of the Service Contract 54 ("SC 54") shallow water inventory in the Philippines following the recent Yakal and Tindalo discoveries. Based on these recent well results and interpretation of the 3D seismic data, Kairiki has determined estimated potential oil in place of 87 million barrels for 11 of the leading 12 prospects in the shallow water (mid case, gross un-risked, net Kairiki share is 34.9 million barrels).

The recent successes of the Yakal and Tindalo wells in SC 54 bring the discovery success rate for the five valid pinnacles drilled to date in the Permit to 100%, thereby materially de-risking the remaining extensive shallow water prospect inventory. Additionally, Kairiki believe both Yakal and Tindalo are full-to-spill with better than expected reservoir properties due to their vuggy oil-filled porosity, upgrading the prospectivity of our SC 54 inventory.

Analyses of all data relating to the Yakal and Tindalo wells is currently underway to assess the final scope of the resource range in parallel with the planning and selection of the most efficient option to deliver First Oil through an extended well test as early as 2010. The Joint Venture’s intention is to initially test the Yakal and Tindalo accumulations, expanding the development thereafter by combining other prospects and discoveries in the portfolio with success.

Kairiki acquired a 40% interest in the 5,418 km2 SC 54 Permit in April 2006. Kairiki was attracted to SC 54 by the high drilling success rates achieved in the North West Palawan Basin, a proven highly effective oil charge system linked to the adjacent giant Malampaya field and Nido fields, a diverse portfolio of shallow and deep water prospects, and the very attractive fiscal regime of the Philippines.

Furthermore, Kairiki believes the shallow water portion of SC 54 has the following features:

  • located in the heart of the North West Palawan Basin (ie the Nido Platform) with proven prospectivity and oil production;
  • 31 targets covered by 3D seismic data;
  • the majority of the prospects and leads are the proven pinnacle reef play type and hence are considered highly prospective; and
  • a shallow water prospect and lead portfolio led by the Yakal and Tindalo discoveries which are both considered full-to-spill with a combined mid-case oil in place resource of 8.3 million barrels and an upside of 11.0 million barrels.

Kairiki is now commencing a search for a partner to assist in developing this shallow water project following these recent oil discoveries. A farm-out flyer has been prepared and is being distributed to interested parties.