Philippines
Service Contract SC 54 (SC 54)
40% interest
Operator Nido
Petroleum Limited
SC 54 is located in the productive North-West Palawan basin in water depths ranging from 30m to 1,100m and covers an area of 5,418 km2. Kairiki Energy holds a 40% interest in SC 54 and the remaining 60% is licensed to the operator Nido Petroleum.
Kairiki acquired its interest in May 2006 by farming
into the Permit held by Nido. The Joint
Venture has access to over 1,000 km2 of 3D seismic data (largely
acquired by the JV in 2006-2007) and some 7,500 km of 2D seismic data which has
developed the current prospect and leads inventory.
Shallow Water/Inboard
In April 2008, Kairiki announced a significant acceleration in its shallow water strategy by approving the drilling of at least two shallow water wells with a jack-up rig in late 2008. The majority of previous drilling in the Palawan basin has focussed on the Nido Limestone pinnacle reef play. This is the proven play type in the Basin and historical drilling on 2D seismic data has delivered a greater than 50% success rate. The shallow water area of SC 54 boasts more than 20 pinnacle reef discoveries and prospects with potential oil in place ranging from 2 to 20 million barrels each.
While each individual drilling target is of modest size, the sheer number of targets together with their very low risk represents a material opportunity for near-term cash-flow potential, should the evaluation prove successful.
We intend to commence the evaluation of the shallow water area with the drilling of at least two wells in late 2008, using the "WilBoss" jack-up drilling rig for a two well drilling program with the possibility to extend the contract for additional wells.
Outboard (i.e. water depths > 200m)
Gindara-1
Following a detailed technical review of the Abukay 3D seismic acquired in late 2006, the Gindara Prospect (formerly named Coron North) has been matured into a large, robust, four-way dip closed structure with a mapped areal extent of 11 km2 and a closure height of up to 210 metres. Gindara has the capacity to accommodate in excess of 478 million barrels of oil in place, assuming the structure is filled to spill.
High quality Nido Limestone carbonate reservoirs are prognosed at the Gindara-1 location based on the results of the Coron-1 well, drilled in 1993 10 km to the south of the Gindara structure. Subsurface analysis has also confirmed the Gindara Prospect is linked to the same hydrocarbon source kitchen as the giant Malampaya field with estimated recoverable resources of 600 million barrels of oil equivalent located 25 kms to the north east of the Gindara Prospect location
Lapu-Lapu
The Lapu-Lapu prospect west of Gindara is a standout follow-on target, particularly on the back of exploration success in Gindara, which would validate the effectiveness of hydrocarbon charge from the east. The prospect not only offers the Nido Limestone potential in a look-alike target to Gindara, but also includes a shallower turbidite sand play in dip closure above the Limestone target. Lapu-Lapu has the capacity to accommodate an upside resource potential of 981 million barrels of oil in place assuming the structure is filled to spill; that is potentially twice the potential accommodation capacity of Gindara.
The Joint Venture is currently working to secure a suitable rig to drill the Gindara outboard prospect, in 2009.