Cadlao Oil Field Development Project

Source: 12/15/2021, Location: Asia

• Sacgasco’s NIDO appointed Technical Operator for SC 6B and the Cadlao Redevelopment Project
• NIDO plans to submit POD to Philippines Government early 1Q 2021
• SGC working interest increased to 9.09% (from 2.727%)
• Farmin discussions progressing to increase SGC’s working interest
• Jackup rig LOI received for drilling and testing program in the Philippines starting 1H 2022.

Sacgasco Limited is pleased to announce that its wholly owned subsidiary, Nido Petroleum Philippines Pty Ltd (“NIDO”), has secured a Sale and Purchase Agreement (“Agreement”) on Service Contract Block 6B (“SC 6B”) designed to accelerate the anticipated redevelopment of the Cadlao Oilfield and exploration of nearby East Cadlao oil prospect. The Joint Venture has agreed to appoint NIDO as the technical operator for SC 6B advising The Philodrill Corporation as the Operator of Record.

Under the Agreement, NIDO has paid A$250,000 to the previous operator of SC 6B (Manta Oil Company Limited, “MOCL”) upon their withdrawal from SC 6B in return for their proprietary database. The database will greatly enhance and accelerate the planned development activities on SC 6B. This payment is intended to be recovered from the Joint Venture parties out of SC 6B production in accordance with working interests.

As part of the Agreement, MOCL has waived their right to exclusivity which allows for farmin discussions between Nido and the remaining Joint Venture parties to progress.

Participating Interests are expected to revert to the following subject to approval from the Philippines Department of Energy of the MOCL withdrawal:

- With the lifting of the exclusivity under the Agreement, the Company intends to increase its interest via farmin offer to the remaining Joint Venture parties.
- NIDO intends to prepare and submit a Plan of Development (POD) on behalf of the Joint Venture in 1Q 2022.
- This will include an Extended Well Test (EWT) to be drilled in 2Q 2022 for data collection, resource volume confirmation and early cashflow.

NIDO is in discussions with various service providers with a view to completing the POD and is accelerating this process in view of the ambitious timeline. A non-binding LOI has been received from the Russian rig company Arktikmorneftegazrazvedka (AMNGR) for the Murmanskaya jack-up drilling rig which is available in nearby Vietnam and suitable for the EWT.

The planned EWT will involve a single well, with production equipment situated on the Jack Up drilling rig with oil being produced into a Floating Storage and Offloading Vessel (FSO) or barge for shuttling to a local refinery.

Given its close proximity to Cadlao, there is also the opportunity to drill the East Cadlao Prospect from a Cadlao EWT location, subject to further maturing of the prospect to drill ready status.

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