Nido secures Dragon Oil as farm-in partner to SC 63
MAKATI CITY -- Nido Petroleum Philippines said it has entered into a farm-out agreement with Dragon Oil, with respect to Service Contract 63 ("SC 63") NW Palawan Basin, Philippines.
Under the terms of the agreement, the farm-out will be completed as a two stage process, with Dragon Oil initially acquiring a 40% participating interest in SC 63 from Nido’s current 50% participating interest in Service Contract 63.
The second stage of the farm-out is subject to certain conditions and Philippine Government approvals being met which will allow PNOC–Exploration Corporation the opportunity to divest a proportion of its participating interest in SC 63.
Assuming the relevant conditions are satisfied and approvals are secured for the second stage of the process, Nido will seek to secure an additional net 10% participating interest in SC 63 from PNOC-EC on the same terms agreed between Nido and Dragon Oil. Nido will then have a 20% working interest in SC63 and will then contribute $2.0 million towards the cost of the Baragatan well.
During the Baragatan-1 drilling operations Nido will remain as Technical Operator and PNOC-EC as Operator of the Service Contract. In this period, Dragon Oil will second personnel to the drilling team and will be responsible for overall drilling management. Following the drilling of the Baragatan-1 well Dragon Oil will have the right to become Operator of the Service Contract.
Nido’s MD, Phil Byrne, said,"On behalf of the SC 63 Operator, PNOC-EC, I am extremely pleased to welcome Dragon Oil as a partner into the Service Contract and the drilling of the Baragatan-1 exploration well, in the first half next year. Dragon Oil brings a wealth of exploration, development and operating experience to the SC 63 Joint Venture through their expanding portfolio, in particular through their world class Turkmenistan producing asset. I look forward to working with Dragon Oil in SC 63 as Nido Petroleum moves ahead with its plans to drill at least four exploration wells in its Philippine and Indonesian acreage in 2014."