Forum Finalizes Exploration Agreement in Manila Bay

Forum Exploration has finalized the terms of the Service Contract Application for the Manila Bay -- West Central Luzon block (Manila Bay) with the Government of the Republic of the Philippines. The contract will be assigned as Service Contract 43 (SC43) and covers some 480,000 hectares including Manila Bay and a portion of the contiguous landward area of Luzon Island.

Larry Youell, President & CEO said "We are delighted to have the Manila Bay -- West Central Luzon block contract at a time when the first high profile public contracting round (PCR- 1) is taking place in the Philippines. The whole industry is generally being made more transparent and we are extremely fortunate to have finalized the terms of the contract with the government without the necessity of first going through the GSEC process, thus saving time and money. "Our work commitment on this area will begin this fall, when we expect to commence shooting new seismic over the Manila Bay offshore prospect. We will be acquiring 250KM of High Resolution 2-D seismic, and depending on the results, anticipate drilling a well. The two main offshore prospects in the Manila Bay area, known as prospects A and B are estimated to contain at least 0.7 TCF of gas. Due to the close proximity of a developing gas market and the shallow water depth (around 75feet) in Manila Bay, a discovery of gas in commercial quantities would be readily developed, particularly in view of the technology available to exploit gas reserves in such locations. "Furthermore, PGS Reservoir Consultants (UK) has suggested that the shooting of further seismic could identify additional prospects within the Manila Bay area."

Manila Bay lies at the southern end of the Central Luzon Trough. The Trough is bounded to the east by the Sierra Madre volcanic arc, to the west by the Zambales ophiolite complex, and to the south by a major strike-slip fault separating it from the Mindoro-Palawan area.

The main target zone is the Malo-Pungatan Formation of the Late Miocene to Early Pliocene age. The formation is composed of shelfal carbonates shallowing upwards as a sequence of detrital carbonates with coral fragments. Fracturing may play an important role in enhancing reservoir properties in the carbonate facies. The presence of platform carbonates in the area of the Manila Bay was confirmed by the Manila Bay-1, Manila Bay-1AST and Redrill wells. Gas was observed within the carbonates. A drill stem test conducted was assessed by PGS to be invalid.