PRYCE CORP. said its major subsidiary had decided to step up its exploration offshore Palawan with the possible drilling of an appraisal well, the property developer and gas trader told the stock exchange Wednesday.
It said Pryce Gases, Inc. (PGI), along with a consortium partner, plans to enter Sub-Phase 5 of Service Contract (SC) 55. The move will take effect on Aug. 26, with an option to begin the appraisal period before that date.
It said the appraisal well may involve the drilling of an ultra-deepwater well for at least $3 million.
PGI is principally engaged in the importation, distribution, and retail sale of liquefied petroleum gas or LPG.
Pryce said the consortium may also opt to enter an appraisal period that would require the implementation of an appraisal work program. The program requires the approval of the Department of Energy (DoE), and may involve the drilling of an appraisal well, it said.
SC 55 is a deep-water block in the southwest Palawan Basin that covers an area of 9,880 square kilometers.
“It is in the middle of a proven regional oil and gas fairway that extends from the productive Borneo offshore region in the southwest, to the offshore Philippine production assets northwest of Palawan,” Pryce said.
PGI acquired its interest in SC 55 in July 2015 through a farm-in agreement with Otto Energy Philippines, Inc., former operator and ex-consortium partner in the service contract. It has a 25% participating interest in SC 55.
Separately, Phinma Petroleum and Geothermal, Inc. (PPGI) told the stock exchange that its subsidiary Palawan55 Exploration & Production Corp. notified the DoE on Wednesday about entering the fifth sub-phase of SC 55.
Like Pryce, it said the move is without prejudice to the unit’s option to enter the appraisal period of SC 55 no later than the said date.
Palawan55 is the operator of SC 55 and owns a 37.5% participating interest. The sub-phase’s commitment to drill one ultra-deepwater well at a water depth beyond 1,500 meters could kick in by the second quarter of 2020.
PPGI said that in 2015, the SC 55 consortium drilled the Hawkeye-1 well in 1,700 meters of water at a cost of $23.5 million.
“The well discovered natural gas at the crest of the target structure but the estimated volume of the accumulation was deemed by the former Operator to be non-commercial on a stand-alone basis,” it said.
“Palawan55 is currently undertaking quantitative interpretation of over 1,000 sq. km. of recently reprocessed 3D seismic data over the greater Hawkeye area and a large carbonate reef prospect,” it added.
On Wednesday, shares in Pryce rose 5.51% to close at P5.36, while those of PPGI fell 12.66% to P6.00. — Victor V. Saulon