Viking Energy Holdings 2 Ltd., private London operator, will head a group that plans to bring into production Yakal, Tindalo, and Nido-1X1 oil discoveries on SC 54A in the Philippines offshore northwest Palawan Island.
Subject to negotiating and signing a formal agreement, Viking will drill one well in each area. The first field would be brought into production by the second quarter of 2013, subject to approvals from third parties and the Philippines Department of Energy and the availability of rig and production facilities.
The other participants in SC 54A plan to collectively assign a 60% equity interest in the block in return for Viking assuming operatorship and carrying them in three oil field developments up until first production. Viking will finance all required capital outlay associated with bringing the fields into production.
The final investment amount will be agreed between Viking and the participants on selection of the most appropriate technical and commercial solution. Viking will receive a preferential proportion of the net cash flow generated until it has recovered its capital expenditure.
Viking anticipates bringing the Yakal and Tindalo discoveries into production first, followed by Nido-1X1 later.
Viking would use cost-effective production and storage facilities comprising a mobile offshore production unit and an FSO/storage tanker moored to a CALM buoy to commercialize the fields. Viking and the participants will collaborate with Offshore Production Solutions and Thome Oil & Gas on the project.
OPS will provide offshore production facilities under bareboat charter arrangements on competitive market terms to be agreed, and TOG will provide operation and maintenance services for the offshore production facilities under an operation and maintenance agreement on competitive market terms to be agreed.
Participating interests in SC 54A relating to the memorandum with present and post farmout interests are Nido Petroleum Philippines Pty. Ltd. 42.4% and 16.96%, Kairiki Energy’s Yilgarn Petroleum Philippines Pty. Ltd. 30.10% and 12.04%, TG World BVI Corp. 12.5% and 5%, Trafigura Ventures III BV 15% and 6%, and Viking Energy zero and 60%.