Nido Petroleum Limited is pleased to advise that its Board of Directors has resolved to commit the resources of the Company to pursuing the development of the Tindalo oil discovery in the Philippines.
•The Tindalo development, located within the inboard, shallower portion of Service Contract 54 offshore Philippines, has the capacity to provide a second cashflow stream to Nido within the next 12 months. The Nido Board has endorsed the first project in the area and will fast track the Tindalo development utilizing a jack-up rig based production scenario.
Contributing to this decision is the Board’s confidence in the growth of the upstream oil sector in the Philippines. This comes at a time when industry activity in the country continues to increase, short-term prospects for oil prices are improving and long-term sentiment remains positive.
Impact to Nido:
Nido’s President, Jocot de Dios, said that, “The addition of Tindalo production to the current Galoc output could potentially double Nido’s current net production position within the next 12 months. The strategic impact of this development is to reduce the Company’s reliance on any single cashflow stream and to deliver ongoing revenue.
” Mr de Dios went on to say, “Nido, as the Operator of Service Contract 54, will have direct control over the Tindalo development and we are confident that we will be able to duplicate the top-quartile operational performance achieved last year during the drilling programme in 2008. It will be noted that both the Yakal and Tindalo discoveries, the first in 14 years in the Philippines, were drilled last September and October on schedule, within budget and with an exemplary health and safety record.”
Project Execution :
The objective of the Tindalo development is to utilize a jack-up rig to complete the already drilled Tindalo-1 well and produce oil into a floating storage and offtake vessel (FSO). After recent discussions with several service providers, Nido expects that these services and associated hardware will be readily available in the current “soft-market” at costs discounted to those experienced even 12 months ago.
Coordinating the mobilization of key pieces of hardware will determine the schedule from FID to first oil and it is likely that this could be achieved within six months of FID.
Development Concept Selection :
Nido’s Deputy Managing Director, Joanne Williams, said “Earlier this year we evaluated all available development concepts – in the current market conditions, the rig-based development option delivers earliest first oil and cashflow with the lowest risk capital exposure. With the expected combination of highly productive pinnacle reef reservoir and the excellent fiscal terms in the Philippines, the initial Tindalo development is expected to fund and support the subsequent development of the remaining inboard area of SC54, which includes 3 further discoveries and as many as 20 follow-up, low risk drilling targets.”