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Company Information for Nido Petroleum Limited
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 ASX; NDO
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Company Statement
Nido Petroleum is an oil & gas exploration & production company whose business activities are focussed on the Philippines offshore Palawan Basin.
The company is headquartered in Perth, Western Australia and is listed on the Australian Stock Exchange.
Assets & Strategy: Our Strategy
Nido’s strategic focus is on oil & gas exploration & production activities in the North West Palawan Basin of the Philippines. The company’s strategic focus can be broken down into three sub-components: Resource Development, Oil & Gas Exploration and Non-core Assets.
Resource Development
Using low-cost development techniques, Nido is seeking to commercialise discovered offshore oil resources that have previously been considered sub-economic. There are examples of undeveloped oil resources in the Palawan Basin that are under investigation by Nido, with a view toward seeking commercialisation. The West Linapacan oil resource is a good example.
Oil & Gas Exploration
Nido has accumulated a world-class portfolio of exploration acreage in the Philippines Palawan Basin. Nido is seeking to high-grade this seismic acquisition, establish an inventory of drillable leads and prospects, introduce farm-in participants where appropriate and undertake exploration drilling.
Non-core Assets
Nido’s non-core assets include a 25.7% interest in Cool Energy Ltd., a clean technology company aimed at extracting CO2 from natural gas which improves the commercial viability of extracting previously uneconomical gas reserves and reduces CO2 emissions.
Operations and Technology
Philippines: Nido & Matinloc Oil Fields
Nido oil field
The Nido oil field is located 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 South Nido No.1 - this well was renamed later as Nido-A1. An additional development well, Nido-A2 was drilled in the structure and completed in July 1979.
- Nido-B was discovered in January 1978 with the drilling of South Nido West (later renamed Nido-B1). Two additional development wells (Nido-B2 and -B3) were drilled and completed in mid-1979.
Both fields comprise pinnacle or atoll-type carbonate reefs generally of Lower Miocene age. Geological interpretation together with production evidence, show the reservoir to be highly fractured.
Both fields were switched to cyclic production regime in mid-1984 with an extended shut-in period between January 1987 and May 1995. By the end of March 2005 total Nido production had passed 17 million barrels of oil.
The Nido fields produce crude oil with a gravity 27°API and 2% sulphur content.
Nido-1X1 oil field is another Lower Miocene pinnacle reef structure similar to Nido-A and -B. It was discovered in August 1979 in 36 metres of water, approximately 2 km to the north-east of the Nido-A field.
Nido Petroleum is now undertaking extensive field reviews of the three Nido oil fields to investigate means by which oil reserves can be increased via the implementation of various production enhancement strategies. These strategies include rehabilitation of suspended oil wells, review of attic oil potential, investigation of well workover opportunities, review of artificial lift potential and the possible redrill and development of Nido-1X1.
Following completion of this work, Nido Petroleum intends to make a series of recommendations to the SC14 Joint Venture with a view toward enhancing production from the fields.
Matinloc Oil Field
The Matinloc Oil Field is located in Block B of Service Contract 14 (SC14) approximately 50 km north-west of Palawan Island and 54 km north of the Nido oilfield in the Philippines.
Matinloc is located in 25 metres of water and was discovered in January 1979 with the drilling of the wildcat Matinloc-1 well which intersected a carbonate reef build-up. The field is mapped as a four-way closure with a gross hydrocarbon column of more than 91 metres.
Cyclic production began on Matinloc in January 1997.
Since production start-up Matinloc has produced a total of 11.1 million barrel of oil with an average crude oil gravity of 43° API and a GOR around 218 scf/stb.
Nido Petroleum is now undertaking extensive field review of the Matinloc oil field to investigate means by which oil reserves can be increased via the implementation of various production enhancement strategies. These strategies include rehabilitation of suspended oil wells, review of attic oil potential, investigation of well workover opportunities and a review of artificial lift potential.
Following completion of this work, Nido Petroleum intends to make a series of recommendations to the SC14 Joint Venture with a view toward enhancing production from the field.
Nido's working interest in the Matinloc field is 28.283%
Galoc Oil Field
The Galoc field is situated in Block C of Service Contract 14 (SC14), 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 at 2,100-2,220 metres. The Galoc structure has a 57+ metre gross oil column consisting of early Miocene turbiditic sandstone with 16% average reservoir porosity.
The Galoc field was discovered with the drilling of the Galoc-1 exploration well spudded in April 1981, operated by Philipines Cities Service Company (PCSI). A conventional drillstem test (DST) was conducted over 3 intervals with a combined rate of 5,218 stb/d. The maximum test rate was 1,828 stb/d; producing 35° API crude with a GOR of 609 scf/stb from an 8 metre interval.
First oil production from the field is expected between late-2007.
Nido currently holds a working interest of 22.279% in the Galoc field.
West Linapacan
West Linapacan is located in 350 metres of water, approximately 60km offshore from Palawan Island in Service Contract 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 (Redevelopment) and B (Development) structures are NW/SE trending, fault bounded anticlines. West Linapacan B is approximately 7.6 km to the ESE of the 'A' structure. Both are comprised of Upper Eocene to Lower Miocene age fractured limestones. The two reservoirs produce 32-34° API oil. The West Linapacan A field was produced for 3 years in the early 1990's but has been shut-in since early 1996.
Nido sees West Linapacan A as a potential redevelopment opportunity and West Linapacan B as a potential development opportunity.
Work is now in progress to determine the likely recoverable volumes and most appropriate method of redevelopment/development of these two oil resources.
Philippines: Service Contract 54
SC54 is located adjacent to the southern end of Nido's existing SC14 and SC6B licenses and is on trend with Shell's 600 million BOE Malampaya producing gas field. It covers some 537,616 hectares in this proven hydrocarbon basin.
Nido recognised the significant advantages to be gained by further enhancing its existing seismic database with a modern 2D and 3D regional acquisition employing the latest technology. With the support of the Philippine Department of Energy, Nido secured an amendment to SC54 to allow these surveys to take place in 2006.
In 2006 Nido, in conjunction with Joint Venture partner Yilgarn, announced that it had awarded a 3D seismic survey in SC54 to Veritas Geophysical. The approximately 635 sq. km survey will be acquired using the latest solid streamer technology and state of the art acquisition and processing techniques and covers three potential targets:
1. The Coron North Prospect;
2. The untested oil shows at Coron-1; and
3. Princesa, a Miocene Pagasa turbidite lead.
The seismic exploration work programme commenced in mid-2006 with preparations for the 3D survey along with a 550 km, 2D seismic acquisition (to be conducted concurrently with a similar seismic programme in Nido's SC 58.)
Philippines: Service Contract 58
On 18 July 2006 Nido Petroleum announced that it had successfully farmed in with the Philippine National Oil Company (PNOC) to Service Contract 58 (SC58) in the north-west Palawan Basin. As part of the farm-in agreement Nido has been invited to operate the seismic and drilling operations.
SC58 is contiguous to Nido's SC54 and west of SC14 and SC6B. The Service Contract is adjacent to Shell's 600 million BOE Malampaya gas field and offers conventional Nido limestone drilling targets but also provides access to a major part of the Basin's Miocene Pagasa Turbidite play fairway.
The exploration work programme commenced in mid-2006 with preparations for a 3,000 km, 2D seismic acquisition in SC58 (to be conducted concurrently with a similar seismic programme in Nido's SC54.) Nido has secured the MV Veritas Voyager for this survey. The 2D programme will be followed by a targeted 3D seismic survey.
Cool Energy
Nido Petroleum has a strategic investment in Cool Energy Ltd (Cool Energy), a Western Australian based company which is using innovative technology to remove contaminants, particularly CO2, from gas feedstocks.
Cool Energy is using its CryoCell® cryogenic gas processing technology to provide world-class gas processing solutions with a number of advantages to the global energy sector, including environmental, capital and operating cost benefits.
Cool energy has a number of advantages over conventional technology. Cryogenic gas processing replaces chemical and physical solvent processes, meaning no chemical consumption which results in lower costs and no chemical hazards. The operating plant required is smaller and uses fewer equipment components which results in lower capital costs and less operating complexity. The CO2 can also be captured as a liquid, reducing the cost for geo-sequestration.
It will allow users of this technology to unlock gas reserves that were previously considered uneconomic due to their high levels of contaminants and allow for efficient separation of CO2, providing effective disposal of greenhouse gases.
Nido is one of 11 investors in this new technology, along with partners such as ARC Energy, Shell, Woodside Petroleum and Curtin University. Nido’s initial investment comprised a 36% interest in Cool Energy and a series of redeemable convertible share for a total consideration of A$1.595 million in 2005. In December 2005 Shell Global Solutions International became a significant shareholder and Nido’s interest was reduced. Nido’s current interest stands at 25.7%.
- During 2005 and the first half of 2006, Cool Energy designed and constructed a two million cubic feet per day pilot plant which is being used to test the Cool Energy process. This plant is located at ARC Energy’s Xyris gas field in the Perth Basin, 360 kilometres north of Perth.
- In July 2006, field trials of the CO2 stripping technology commenced at the pilot plant. The plant testing is currently 90% complete and is expected to be finished in July 2007. The field trial is designed to verify the CO2 separation capability of the CryoCell® technology by achieving the laboratory results under field operating conditions. The results are currently being analysed to confirm if the technology can be used on a commercial scale.
Geographical Spread
Philippines
Board of Directors and Key Management
| Directors |
| * David Whitby, Chairman of the Board |
| * Jocot de Dios, Chief Executive Officer |
| * James Brown, Non-executive Director |
| * Vince Pérez, Non-executive Director |
| * William Bloking, Non-executive Director |
| Leadership Team |
| * Joanne Williams, Deputy Managing Director |
| * Ashley Gilbert, Chief Financial Officer |
| * Jonathan Pattillo, Head of Exploration |
| * Andrew Francis, Head of Commercial |
Company AddressLevel 3
|
Additional Address/Key ContactPerth Office |
Major Shareholders
| 1 HSBC CUSTODY NOMINEES (AUS) LIMITED | 118,859,123 | 12.6% |
| 2 ANZ NOMINEES LIMITED | 88,782,313 | 9.4% |
| 3 JP MORGAN NOMINEES AUSTRALIA LIMITED | 88,435,330 | 9.3% |
| 4 HSBC CUSTODY NOMINEES (AUSTRALIA) LTD- A/C 2 | 81,757,404 | 8.6% |
| 5 NEFCO NOMINEES PTY LTD | 43,498,768 | 4.6% |
| 6 ANZ NOMINEES LIMITED (SL CASH INCOME 4SL A/C) | 41,307,111 | 4.4% |
| 7 MERRILL LYNCH (AUS) NOMINEES PTY LIMITED | 40,838,902 | 4.3% |
| 8 YANDAL INVESTMENTS PTY LTD | 40,000,000 | 4.2% |
| 9 HSBC CUSTODY NOMINEES (AUS) LTD - A/C 3 | 24,998,141 | 2.6% |
| 10 L WHITBY | 19,527,500 | 2.1% |
Most Recent Statement
31/08/08 - Half Year Financial Report31/08/08 - WilBoss on hire for SC54 drilling
28/08/08 - Galoc Operations Update
25/08/08 - Drilling in SC54 to begin in early September
07/08/08 - Weekly Operations Update to 6 August 2008
31/07/08 - Weekly Operations Update up to 30 July 2008