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Gas2Grid readies Malolos field for potential farm-in partners onshore Philippines

14th January 2015

Gas2Grid has commenced the Malolos Oil Field technical programme to establish the best completion technology to fully appraise and develop the oil field following the award of a two-year technical moratorium by the Philippine Department of Energy

Gas2Grid has commenced the Malolos Oil Field technical programme to establish the best completion technology to fully appraise and develop the oil field following the award of a two-year technical moratorium by the Philippine Department of Energy
According to Gas2Grid, the Malolos Oil Field still represents an attractive investment opportunity despite the recent oil price drop and the immediate effect that it has had on the oil industry worldwide

The moratorium provides security of tenure over Service Contract 44 until 28 January  2017, and within that time the company aims to demonstrate the field commerciality and apply for a 25-year production term.

In conjunction with the work programme, the company has already met with selected companies to consider farming in the Service Contract 44 by funding the oil field appraisal and development.

Further meetings with additional companies are planned.

Gas2Grid hope to complete the work outlined in the technical moratorium granted by the Philippine department of energy as early as possible so that field commerciality is achieved during the second year.

The first year (28 January, 2015 – 27 January, 2016) involves an investment of USD 100,000 which will go towards research aimed at developing the best exploration programme for the Malolos formations and to further test and analyse the field’s potential. The second year will involve a continuation and completion of these works, leading to production launch.

The company’s preference is to fund the full appraisal and development of the Malolos Oil Field by securing a farm-in partner. Farm-out presentations commenced before Christmas, initially targeting oil companies located in Southeast Asia. The farm-out efforts will be expanded over the next few months.

According to Gas2Grid, the Malolos Oil Field still represents an attractive investment opportunity despite the recent oil price drop and the immediate effect that it has had on the oil industry worldwide.

The Malolos Oil Field has a 20.4 million barrel best estimate (P50) contingent resource of good quality, low sulphur crude oil that is located onshore close to transportation in a country with excellent fiscal terms.

All this points to low development and operating costs which should leave a healthy profit margin, even at the current low oil price, according to Gas2Grid.

Gas2Grid  says that in comparison the projects extracting oil (or gas) from onshore shale and offshore oil and gas developments (particularly deepwater discoveries) have high development and operating costs that could be too high for the current oil sale price and are therefore becoming uneconomic.

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