Tetragon has been awarded a Service Contract SC-82 onshore on the island of Luzon in the Philippines (Figure 1).
The permit lies within the Cagayan Basin, a typical Tertiary half graben that contains a series of sandstones, shales, limestones and coals that have good potential for gas discoveries.
A gas discovery well, Nassiping-2, drilled in 1984 (Figure 2), lies within the northern part of the permit and is located only 700m from the local power grid. The well encountered 800ft (244m) of gas shows in platform and reefal carbonates, but was not tested until 28 years later. While the well flowed gas to the surface from the Callao Limestone interval, the test programme was terminated early due to mechanical problems.
The Nassiping structure compares favourably in size to the San Antonio gas field, which abuts the permit to the southwest and produced from similar limestone formations. San Antonio produced gas into a power generation plant and sold electricity to the local power-hungry market for 14 years. Another well in the San Antonio area, Mangosteen-1, also discovered gas in sandstone formations similar to those occurring in the SC-82 area.
The Philippines is a developing and expanding nation which uses gas to generate approximately 30% of its power. Most of this gas comes from the Malampaya gas field, a late life asset. The Philippines is likely to become a gas importer and therefore there is a ready market for any domestic gas discoveries. The fiscal terms in the Philippines are very attractive for production of gas and oil.
The work commitment for SC-82 comprises 5 phases over seven years. The work will include the collation and a review of existing data, seismic reprocessing and new geophysical data acquisition, prior to the drilling of a well which is permitted for Year 7 but can be accelerated at Tetragon’s discretion.
Gather, digitise and review all existing well, seismic and regional data.
Reprocess legacy 2D seismic and integrate with modern well logs.
New geophysical data acquisition over matured leads and prospects.
Integrated interpretation, prospect ranking and drill-site preparation.
Drill one exploration well — accelerable at Tetragon’s discretion.
