NIDO PETROLEUM LIMITED - ASX: NDO

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Description

Nido Petroleum Ltd is one of the leading oil and gas exploration and production companies operating in the Philippines, with headquarters in Perth, Western Australia and a fully staffed office in Manila, Philippines.

The Company's assets are located within the NW Palawan Basin, the premier producing basin in the Philippines. Participating in ten offshore exploration and production blocks, Nido Petroleum Ltd directly operates three: SC 54A, SC 54B and SC 58.

Nido has a high impact exploration and drilling program based on its extensive 2D and 3D seismic data, a factor behind its continued growth. Nido is an innovative company looking ahead to new areas of exploration and development in the future.

Nido is currently in the process of commercialising the Tindalo oil field, located in SC 54A. This will augment production from the Galoc oil field from mid 2010, a field where the Company currently holds a 23% interest in production in SC 14.

Exploration

Nido has one of the largest acreage positions in the Philippine oil and gas sector. All exploration assets are located in the offshore NW Palawan Basin, considered the Philippines' premier producing basin.

The Company's footprint in the NW Palawan Basin covers approximately 30,000 sq km of contiguous high quality acreage with water depths ranging from less than 100m to in excess of 2,000m. This provides Nido with an envious acreage position with substantial running room in which to explore a diverse range of plays across a range of water depths. Much of the NW Palawan basin remains lightly explored despite the numerous oil and gas discoveries made in the shallow water areas of the basin, including Nido's 2008 oil discoveries at Yakal-1 and Tindalo-1, and the single giant Malampaya gas field in Service Contract (SC) 38, operated by Shell Philippines Exploration. The deeper water areas provide Nido with superb leverage to large, high impact exploration targets with multi hundred million barrel potential. If successful, any one of these would have a transformational impact on the Company.

Since 2007, Nido has invested heavily in the acquisition of modern 2D and 3D seismic data which has delivered an extensive Prospect and Lead Inventory of over 90 defined opportunities. 2008 was a watershed year for the Company with the drilling of two successful exploration wells at Yakal-1 and Tindalo-1 (SC 54A) in the Company's first foray as an offshore operator. Following completion of the SC 58 deepwater sea-bed coring project and interpretation of the SC 63 Kawayan 3D seismic survey during 2010, the Company plans to implement an initial five well exploration drilling program across its NW Palawan acreage commencing in 2011.

The drilling program will test high potential value prospects located in SC 54B (Gindara), deepwater block SC 58 (Balyena or Butanding), SC 63 (Aboabo-2 and Kalapato) and SC 54A (Lawaan). The Company commenced pre-planning activities for the drilling program during 2010 including the purchase of some of the long- lead items required for the multi-well program.

Production

Galoc Field - Service Contract 14 Block C1

* Working Interest: 22.879% (non-operator)
* Field Operator: Galoc Production Company (GPC)

The Galoc oil field is situated in Block C of Service Contract 14 (SC 14), in the North West Palawan Basin, offshore Philippines. The field is located around 70 km west of Culion Island in a water depth of approximately 320 metres. The reservoir depth is 2,100 - 2,200 metres and has a 57+ metre gross oil column consisting of early Miocene turbidite sandstone with 16+% average reservoir porosity. Development of the field commenced in October 2007 with the drilling of a pilot appraisal well followed by two horizontal development wells. The wells were completed and flowed in February 2008 after which they were tied back via subsea riser to the Floating Production Storage and Offtake (FPSO) vessel Rubicon Intrepid. First production from the FPSO was achieved on 9 October 2008. The field produces a 35° API, 1.6% sulphur content crude that is marketed within the southeast and north Asian regions. Nido and its Joint Venture partners are currently assessing potential further development options for the field and a number of nearby exploration and appraisal opportunities.

Nido A and B Fields - Service Contract 14 Block A

* Working Interest: 22.49%
* Field Operator: The Philodrill Corporation

The Nido oil field is located in Block A of Service Contract 14 (SC 14), at the southern end of the North West Palawan Basin, approximately 60 km west of Palawan Island. Nido-A was discovered in July 1977 with the drilling of Nido-A1. Nido-B was discovered in January 1978 with the drilling of Nido-B1. Both fields comprise pinnacle or atoll type carbonate reefs generally of the Lower Miocene age. In mid 1979 three additional development wells (Nido-A2, -B2 and -B3) were completed and a production platform was installed at Nido-A and Nido-B standing in waters of 43 metres and 78 metres, respectively. Both fields were brought into production in February 1979 with production peaking in mid to late 1979 at over 13,000 bopd and 29,000 bopd for Nido-A and Nido-B, respectively. Both fields were switched to a cyclic production regime in mid 1984. Total oil production from both fields has passed 18.5 million barrels of oil. The Nido fields produce crude oil with a gravity of 27° API and 2% sulphur content, marketed into the Philippines refineries with the Matinloc crude.

Matinloc Field - Service Contract 14 Block B

* Working Interest: 28.283%
* Field Operator: The Philodrill Corporation

The Matinloc oil field is located in Block B of Service Contract 14 (SC 14) approximately 50 km northwest of Palawan Island and 54 km north of the Nido oil field in the Philippines. Matinloc is situated in 25 metres of water and was discovered in January 1979 with the drilling of the wildcat Matinloc-1 well, intersecting a carbonate reef build-up. The field is mapped as a four-way closure with a gross hydrocarbon column of more than 91 metres. Matinloc-2 and Matinloc-3 were drilled directionally from the Matinloc-1 location in early 1980 and 1982, respectively. The Matinloc production platform was installed in June 1982 and production commenced in July of that same year with a peak production rate of 6,800 bopd. Cyclic production began on Matinloc in January 1997. Since production start-up Matinloc has produced over 12 million barrels of oil with an average crude oil gravity of 43o API. The Matinloc crude is marketed to Philippine refineries together with the oil produced at the Nido oil fields.

West Linapacan A and B Oil Fields - Service Contract 14 Block C2

* Working Interest: 22.28%
* Field Operator: Pitkin Petroleum

West Linapacan is located in 350 metres of water, approximately 60 km offshore from Palawan Island in Service Contract 14 (SC 14) Block C in the Palawan Basin, Philippines. It is comprised of two main oil bearing structures - West Linapacan A and B - and several seismic leads.

The West Linapacan A and B structures are northwest southeast trending, fault-bounded anticlines approximately 7.6 km apart. Both fields produce 32 - 34o API oil from the fractured Nido limestone reservoirs. The West Linapacan A field produced for just over three years in the early 1990s but has been shut in since early 1996.

West Linapacan A was discovered in the early 1990s and, following the drilling and completion of three vertical subsea wells, an FPSO-type development was employed to produce from the field from 1992 through to early 1996. The field had a peak production rate of over 18,000 bopd. It is believed that the field's production rates were held at a level too high for the reservoir to sustain and early water breakthrough occurred. This has most likely resulted in a significant portion of the potential recoverable oil from the field being bypassed during this production phase.

Nido and its Joint Venture partners see West Linapacan A as a potential redevelopment opportunity and West Linapacan B as a potential development opportunity. Work by the Joint Venture is ongoing to assess the likely recoverable volumes and the most appropriate method of redevelopment/development of these two oil resources. Results from this work will be assessed by the Joint Venture in 2010 following which a decision will be made on possible activities in the block.

Mine For

oil, gas

Location of operation(s)

Philippines

Address

Aquila Centre , Level 3 , 1 Preston Street
COMO, WA, AUSTRALIA

Phone

08 9474 0000

Email

Website

http://www.nido.com.au/

Last Updated

3/3/2011