Unit 14, 210 Bagot Road, Subiaco, WA, 6008.
increase from the previous quarter
Sacgasco Limited (ASX: SGC) ("Sacgasco", "SGC" or "the Company") is pleased to provide the Quarterly Activities Report for the calendar quarter ending 30 June 2022. References to SGC or Sacgasco include its wholly owned subsidiaries Nido Petroleum, Sacgasco AB and Sacgasco CA.
The June 2022 quarter and subsequent events referred to in this report represent continuing significant development of the Company into an Exploration & Production (E&P) Company with forward cashflows expected to underpin production and development projects in Canada and California, and maturing development and exploration projects in the world class offshore Palawan Basin in the Philippines.
Sacgasco now hold a suite of assets with large upside in three stable jurisdictions.
Sacgasco, through it 100% owned Nido Petroleum, has interests in 4 Service Contracts offshore Palawan. Nido is Operator for two of the Service Contracts (SC 54 and SC 58) and Technical Operator for another (SC 6B).
Sacgasco's Acreage in the Northwest Palawan Basin, Philippines
Nido, which has been active in the Philippines for over 22 years, was acquired by Sacgasco one year ago and during the year the participants interests in the various Service contracts have been consolidated and simplified by farmouts.
Sacgasco successfully raised approximately $2.917 million towards Philippines drilling equipment for a two-well drilling program including an exploration / appraisal well, Nandino in SC54 and an Early Production Phase (Extended Well Test (EWT)) at the Cadlao Oil Field in SC6B in 2022 / 2023.
A very successful drilling and Well Test planning Workshop was held in Singapore in late May. Attendees to the workshop included experts from Production Solutions Asia, Saba Drilling Services, Grander Energy, and drilling engineering consultants.
Many of the operational and support team at the workshop have been involved in many Early Production Facilities including MOPU's, FPSOs and rig-based Production facilities over the past 30+ years in the Asia Pacific region. EPFs can be used for small reserves that would be financially risky or uneconomical to produce with a permanent production facility.
The Geological and Geophysical Studies ("G&G ") focused on Carbonate Facies Modelling to assist the decision to select the optimum location for drilling the Nandino Prospect and drilling other oil exploration and development wells is nearing conclusion.
Nido has acquired key drilling Long Lead Items ("LLI ") including conductor, casing, liner hangers, casing accessories, wellheads, and bits for the drilling of Nandino and Cadlao.
Total Consideration for the LLI is US$2.9M. The Payment Structure for the acquisition of the LLI is:
Initial consideration US$1.4M to be paid in the manner below:
Secondary Consideration of US$1.5M to be paid on the earlier of a date that is immediately prior to the mobilization of the equipment to drill site or 12 months after Agreement Date.
The payment structure allows the acquisition to be funded from a combination of the Company's recent capital raise and projected cashflow from the Company's North American operations. (Refer: ASX: SGC release 'Capital Raise to Buy Well Equipment for Philippine Drilling' dated 26 April 2022)
Part of LLI purchased for Drilling in the Palawan Basin
Sacgasco's wholly owned subsidiary, Nido Petroleum Philippines Pty Ltd. ("Nido "), is the Operator of SC54. An additional 15% interest was acquired from the receiver appointed to handle the default of participant Halo BV SC54 ("Halo ") in SC54. Nido paid US$126,624 to remedy the default and henceforth have unencumbered title to an additional 15% interest in SC54, which includes the Nandino Oil Prospect and Nido Limestone hosted oil discoveries at Tindalo, Nido 1X and Yakal.
Currently the most attractive Prospect in SC54 is the Nandino Oil Prospect. Nandino lies updip and on-trend with 4 oil discoveries within SC54. A total of over 119 metres of oil column and strong oil shows are interpreted in two previous tests of the greater Nandino structure.
Prospective Resources in the Nandino Prospect have been endorsed by RISC Advisory (RISC ). (Refer ASX announcement dated 3 March 2022)
Note 1: The estimated quantities of hydrocarbons that may potentially be recovered by the application of a future development project relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration, appraisal and evaluation is required to determine the existence of a significant quantity of potentially movable hydrocarbons.
Nido and its JV Participants elected to proceed to Sub-Phase 7 will be for a period of 1 year from August 2022 and includes a commitment to drill one well. TG World (Blue Sky) has elected to pay 85% of the costs of the planned Nandino well to earn an additional 36.25% participating interest from Nido.
Subject to DOE approval, the resulting working interests in SC54 are:
TG World (Blue Sky Resources
* Subject to DOE approval and completion of Nandino drilling
# Halo SC54A BV ("Halo"), previous holder and owner of a participating interest in SC 54, defaulted on its obligations in SC 54 by failing to pay, despite repeated demands, its share in joint expenses. As a result of Halo's default, its previous participating interest is now held by Nido (a Sacgasco subsidiary). Refer SGC ASX Announcement "Philippines Acquisition and Update" dated 14 June 2022.
SC 6B Cadlao (SGC (Nido) Technical Operator)
The Philippines Department of Environment and Natural Resources (DENR) delivered a certificate of Non-Coverage ("CNC") dated 11 May 2022, for Service Contract No ("SC") 6B Cadlao Field Appraisal Project, and Work Program and Budget approval for SC 54 (Nandino Area).
Sacgasco's wholly owned subsidiary, Nido Petroleum Philippines Pty Ltd. ("Nido"), is the designated Technical Operator of SC 6B. Receipt of the CNC will allow Nido to conduct surveys, drill exploration and appraisal wells and extended well test(s) in SC 6B which covers the Cadlao Oilfield and the east Cadlao Oil Prospect. Application is being made for ancillary approvals required for other aspects of the drilling program.
The Cadlao Field previously produced 11.1 million barrels of oil between 1981 and 1991 and at the time production ceased the field was still producing 950 bopd (separated from 5,900 barrels of produced liquid per day) from 2 subsea wells. Initial production from the discovery well, Cadlao-1A, was over 6,000 bopd.
A proposal to drill a new well aimed to recover oil updip from the prolific Cadlao 1 well and to then conduct an Extended Well Test ("EWT") to maximize reservoir knowledge and reduce risks associated with redevelopment of the field, as well as provide early cashflow has been approved by Joint Venture participants and is awaiting the DOE approval.
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Sacgasco Limited published this content on 29 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 July 2022 08:14:13 UTC.