Tetragon and JV partners have been awarded two offshore Service Contracts (SC-80 and SC-81) in the Bangsamoro Autonomous Region of Muslim Mindanao (BARMM) following successful bids for the blocks in the 2024 Philippine Bid Round and 1st BARMM Conventional Energy Bid Round.
The permits lie in the Sandakan Basin of the Sulu Sea, the least explored of the prolific Circum-Borneo basins with no production to date. SC-80 contains two undeveloped gas discoveries drilled in 2009 and 2010. Contingent Resources of 470 Bcf gas and 5 MMbbl Condensate 2C recoverable have been certified in two existing discoveries (Dabakan-1 and Palendag-1A).
Multiple exploration prospects and leads, with Multi-TCF gas resource potential, occur on both blocks covered by extensive 3D and 2D seismic.
Philippines offers excellent fiscal terms in a cost recovery regime plus other incentives and allowances.
The permits are located in a relatively underexplored part of the broader Circum-Borneo hydrocarbon province, which has seen the discovery of significant oil and gas resources, including hundreds of trillions of cubic feet (TCF) of gas and billion barrels of oil (Bbo) (Figure 2).
Permit SC-80 contains the Dabakan-1 and Palendag-1A gas and condensate discoveries which are classic Circum-Borneo toe thrust fold belt structures containing multiple turbidite sandstone reservoirs (Figure 3). Contingent Resources (2C) in the two discoveries of 470 Bcf of gas and 5 MMbbl (million barrels) of condensate were certified by ERCE / Sproule in 2026. The discoveries were drilled by Exxon in 2009 and 2010 but were not developed at the time due primarily to low gas prices and economic materiality concerns. Tetragon and its Joint Venture partners consider that the current market conditions allow for a more positive assessment of economic potential of these fields.
Figure 2 shows the magnitude of the oil and gas discoveries to date in the Circum-Borneo sedimentary basins. To the northeast of Borneo in Malaysia and Brunei almost 12 billion barrels of oil and over 110 trillion cubic ft of gas have been discovered to date. To the southwest, in Indonesia, over 5 billion barrels of oil and 70 trillion cubic feet of gas have been discovered to date. The Sandakan Basin, where permits SC 80 and 81 lie, has been subject to limited exploration, and to date, only around 500 billion cubic ft (Bcf) of gas has been discovered.
In addition to the discovered gas, there are several significant exploration prospects in SC80 and SC81 in turbidite fans within the fold belt and basin floor fans within and outboard in the foredeep. There are also indications of older carbonate deposits which exhibit reef-like characteristics (Figure 3 and Figure 4).
Figure 3 is an illustrative seismic line running across permit SC 80, showing the two discovery wells, Dabakan-1 and Palendag-1A. An undrilled thrust occurs adjacent to these discoveries. The large Halcon prospect is a basin-floor fan lying outboard of the thrust belt in the Foredeep, which could have multi-Tcf potential. Deeper carbonate reef leads also occur in the sub-thrust.
The largest and most attractive prospect is Halcon, an outboard basin floor fan, with potential for multi-TCF of gas (Prospective Resources). The extent of the Halcon prospect can be seen on seismic amplitude extractions which show classic turbidite fan characteristics which form the reservoirs for many major gas discoveries in the area (Figure 6). This large deep-water prospect will undergo further evaluation and maturation toward drillable status.
Figure 6 illustrates the large Halcon prospect. It is defined by the sweetness geophysical attributes that show the extent of the reservoir sand. The seismic reprocessing and inversion modelling that is part of the work program is expected to provide higher quality indications of gas fill for this prospect.
Permit SC-81 is located in shallower water nearer to the Borneo shelf than SC-80 (Figure 7). It contains exploration prospects located mainly in the eastern portion of the permit in slope fan channel facies and deepwater fold belt settings (Figure 7). These prospects and leads formed in similar structural and depositional settings to the SC-80 contract area to the North.
