PERTH, Australia, October 27, 2010 /PRNewswire/ -- Nido Petroleum
Limited ("Nido", ASX: NDO) is pleased to announce that it has
entered into an agreement with Shell Philippines Exploration B.V.
("Shell"), a subsidiary of the Royal Dutch Shell Group, to farm-out
27% out of its current 60% participating interest in the highly
prospective Service Contract 54 Block B ("SC 54B") in the NW
Palawan Basin, Philippines.
Highlights of the transaction include:
- Shell farms into SC 54B acquiring a 45% participating interest
(Nido contributing 27% and SC 54B partner Kairiki Energy Limited
("KIK") contributing 18%);
- Gindara drilling window narrowed to March - May 2011;
- Drill-ship 'Frontier Phoenix' identified for potential use on
Gindara-1; and
- Nido will remain Operator for the drilling of the Gindara-1
exploration well.
Transaction Summary
Under the terms of the Farm-in Agreement, Shell will acquire a
45% participating interest in SC 54B with Nido contributing 27% and
SC 54B partner Kairiki Energy Limited contributing 18% of their
respective participating interests. To earn its participating
interest Shell will undertake the following:
- Contribute 75% of the Gindara-1 exploration well cost up to a
maximum well cost of US$24
million;
- pay US$2.5 million towards past
seismic costs; and
- pay its pro-rata share of the 2010 and 2011 Work Programme and
Budget from the date of signing.
Under the terms of the deal, Nido will remain operator of SC 54B
for the drilling of the Gindara-1 exploration well.
On completion of Shell's farm-in, participating interests in SC
54B will be as follows:
Shell Philippines Exploration B.V. (Shell) - 45%
Nido Petroleum Philippines Pty Ltd (Nido, ASX: NDO) - Operator - 33%
Yilgarn Petroleum Philippines Pty Ltd, (Kairiki, ASX: KIK) - 22%
The transaction is subject to certain conditions, including
joint venture approvals and the approval by the Philippine
Department of Energy (DOE) of certain amendments to the Service
Contract and the assignment of the relevant participating interest
to Shell.
Commenting on the deal, Nido's President and CEO, Jocot de Dios,
said, "It is with great pleasure that we welcome Shell as a partner
into the SC 54B consortium. Shell is amongst the largest and most
experienced oil and gas companies in the world. It has had over 96
years of operations in the
Philippines and a deep
understanding of its oil and gas sector."
"This arrangement allows Nido to quickly drill Gindara, our
leading prospect, and remain focused on maturing exploration
drilling plans in SC 58 and SC 63. Nido is working to deliver the
five well exploration programme announced earlier in the year."
Jocot, went on to add.
Gindara lies approximately 50km immediately south of the Shell
operated Malampaya gas field in SC38, the largest discovery made in
the Philippines to date and
currently on production.
Nido's Head of Exploration, Jon
Pattillo, commented, "I am pleased to have Shell join Nido
in SC 54B and in the drilling of the Gindara prospect next year. An
important element of Nido's exploration strategy has been to join
hands with a company of Shell's global stature who bring
world-class
development experience and access to cutting edge technology.
Nido looks forward to working closely with Shell on this exciting
project".
Nido has now commenced detailed drilling planning, including the
ordering of long-lead items and materials, to allow the Gindara
prospect to be drilled during the March to May 2011 drilling window.
Yours sincerely,
Jocot de Dios
President and CEO
For more information or a copy of SC 54B Location Map and
Gindara Prospect, please contact:
Jon Pattillo
Head of Exploration
T: +61-8-9474-0000
F: +61-8-9474-0099
http://www.nido.com.au
