Nido Petroleum has taken 100% equity and operatorship in a new service contract, SC 54, in the Palawan Basin, while Ottoman Energy has acquired significant working interests in two offshore Philippine service contracts, through a farmin and a new licence Application.

Nido’s new SC 54 lease is adjacent to the southern end of the company’s existing SC 14 and SC 6B licenses and on trend with Shell’s 600 million boe Malampaya producing gas field.

“SC 54 covers 537,616 hectares and represents a four-fold increase in the company’s acreage in this proven hydrocarbon basin,” Nido said.

Nido has made a firm commitment to sixmonths and US$220,000 including geological and geophysical evaluation, after which it can choose to commit to drilling one well during the following 12 months.

“Nido has held acreage in the Philippines since 1995 and has developed a substantial geoscience database including licensed 3D and 2D seismic data, and comprehensive well and field data,” the company said.

“In late 2004 Nido gave priority to conducting a prospects and leads review of the Palawan Basin using this data. Multiple play opportunities were identified in the open acreage.”

The permit’s Pagasa turbidite reservoirs are analogous to the large oilfields discovered by Hardman and Woodside in offshore Mauritania in recent years, according to Nido’s head of exploration Paul Quaife.

“We have been able to transform our substantial Palawan database into meaningful information, and with the invaluable assistance of our Manila office, secure this very exciting addition to our exploration portfolio,” he said.

“Nido has previously identified a large, four-way dip and fault-dependent closed prospect, Coron North. The six-month work program will focus on finalising an in-depth technical and commercial evaluation of Coron North in order to attract a major oil industry farm-in partner.”

Winning this permit is a breakthrough for Nido, according to managing director Dave Whitby.

“It represents our first operatorship in the Philippines and provides us with the potential for sustainable growth as a company in an area which is very familiar to us,” Whitby said.

“We believe that the Palawan Basin has a rich source rock and is under explored, therefore the upside potential of SC 54 is substantial.”

The SC 54 work program will begin immediately in Nido’s Perth and Manila offices.

Meanwhile, Ottoman Energy has taken stakes in two blocks – a 40% interest in SC 51 in the Visayas Basin, and a 42.5% share of SC 55, an ultra deep-water block in the south-west Palawan Basin.

In SC 51, Ottoman (40%) and its partner AustralAsian Energy Limited (“AustralAsian” – 40%), have entered into a Farmin Agreement with a Filipino consortium (“Assignors”) composed of Alcorn Gold Resources Corporation, Trans-Asia Oil and Energy Development Corporation and PetroEnergy Resources Corporation.

SC 51 covers 4,440 square kilometres and consists of two blocks: an onshore–offshore block over North-west Leyte island, including the undeveloped Villaba-1 gas discovery, and an offshore block in Cebu Strait between the islands of Cebu and Bohol, which includes several prospects including Argao.

Under the farmin agreement, Ottoman and AustralAsian will undertake at their sole cost and risk a work program that will satisfy the minimum work program and financial commitments under the first sub-phase of the exploration period of the service contract, and carry the other partners in all administrative and overhead costs associated with the agreed work program.

The work is to begin as soon as the farmin agreement has recceived regulatory approval and to be completed not later than one year thereafter. By then Ottoman and AustralAsian must notify the other partners whether they will drill the first exploratory well under the service contract.

If they do choose to drill the well, Ottoman and AustralAsian must undertake and fund the drilling at their sole cost and risk. Unless all the Parties agree otherwise, the exploratory well will test the Argao prospect and be drilled to a minimum total depth of 7000 feet subsea.

In SC 55, Ottoman and AustralAsian each have a 42.5% stake. Their partner in this block is TransAsia Oil and Energy Development Corporation (15%).

The chas onsortium committed to a work program consisting of a 400 km seismic survey, processing and interpretation of 358 km of 2002 seismic data and reprocessing and interpretation of 200 km of vintage 2D seismic, gravity and magnetic data.

The program will be carried out within the first 18 months of the contract term, at a minimum cost of US $ 400,000. The partners have successive options to drill up to four exploratory wells during the balance of the seven-year exploration period.

SC 55 is a large ultra-deep water permit covering an area of 9,000 square kilometres and consisting of two blocks. Seismic has identified several prospects.

“One such prospect, Marantao, is a giant reef, at least five times larger in size than Malampaya,” Ottoman managing direcctor Jaap Poll said.

“The Marantao prospect lies on-trend with the giant oil discoveries immediately to the south-west in offshore Sarawak.”