Nido said the Energy Searcher drill ship would initially drill Galoc-3 in a 12.5-inch hole, before horizontal drilling starts in an 8.5-inch hole to a planned total depth of 4462m.

Galoc-3 is planned to have a 1600m horizontal production section to maximise intersection of the oil column.

Once drilling is finished, operator Galoc Production Company would run a 5.5-inch liner, install a subsea tree and flow-test both the wells.

The Galoc-3 and Galoc-4 development wells are targeting 23.5 million barrels of proved and probable (2P) reserves as certified by Gaffney, Cline and Associates.

These deviated horizontal wells are aimed at penetrating 1600m of the oil-bearing sandstone reservoir at depths of around 2000m.

First oil is expected from Galoc in April, with production to be coursed through a floating storage and offloading facility.

Nido, which has a 23% stake in Galoc, will be entitled to about 4000 barrels of oil per day once production starts in the first quarter of 2008.

Otto has received its stake in the project via the acquisition of a 31.38% shareholding in Galoc Production Company, which is operator and holds a 58.29% stake in the development in offshore Palawan Basin service contract SC14C.

Other members of the consortium are Alcorn Gold Resources, Forum Energy, Oriental Petroleum, PetroEnergy Resources and Philodrill.