Nido secures Dragon Oil as farm-in partner to SC 63

Offshore staff

PERTH, AustraliaNido Petroleum Ltd. (ASX: NDO) has entered into a farm-out agreement with Dragon Oil plc, on Service Contract 63 (SC 63) in northwest Palawan basin, Philippines. SC 63 includes the Baragatan-1 exploration well.

Under the agreement, the farm-out will be completed as a two-stage process, with Dragon Oil initially acquiring a 40% participating interest in SC 63 from Nido’s current 50% participating interest.

The second stage of the farm-out is subject to certain conditions and Philippine government approvals to allow PNOC–Exploration Corp. (PNOC-EC) to divest a proportion of its participating interest in SC 63.

Assuming that the conditions are satisfied and approvals are secured for the second stage, Nido will seek to secure an additional net 10% participating interest in SC 63 from PNOC-EC on the same terms agreed between Nido and Dragon Oil. Nido will then have a 20% working interest in SC 63 and will contribute $2 million toward the cost of the Baragatan well (based on the $25 million dry hole cost cap).

During the Baragatan-1 drilling operations, Nido will remain as technical operator and PNOC-EC as operator of the service contract. In this period, Dragon Oil will second personnel to the drilling team and will be responsible for overall drilling management. Following the drilling of the Baragatan-1 well Dragon Oil will have the right to become operator of the service contract.

Drilling of the Baragatan-1 exploration well is expected in 1H 2014.


Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now


Maximizing Operational Excellence

In a recent survey conducted by PennEnergy Research, 70% of surveyed energy industry professional...

Leveraging the Power of Information in the Energy Industry

Information Governance is about more than compliance. It’s about using your information to drive ...

Reduce Engineering Project Complexity

Engineering document management presents unique and complex challenges. A solution based in Enter...

Revolutionizing Asset Management in the Electric Power Industry

With the arrival of the Industrial Internet of Things, data is growing and becoming more accessib...