FUGA ISLAND 1 WELL - SHELL OPTION TO TAKE MAJOR STAKE
Philippine National Oil Company - Exploration Corp. (PNOC-EC) have advised they are scheduled to sign today a memorandum of agreement giving Shell Philippines Exploration BV (SPEX) an option, following completion of Fuga Island 1 well, to assume operatorship and acquire up to 50% of PNOC-EC's and affiliate company PNOC-Energy Development Corporation's (PNOC-EDC) combined (78.75%) interest for the possible joint development of the natural gas project that may follow from success of the Fuga Island 1 exploration well.
Based on the operator's estimates, the potential recoverable reserves of the Fuga Island prospect are 5,240 billion cubic feet of gas from the sum of the Labuagan, Sicalao and Ibulao reservoirs.
Fuga Island 1 which spudded only 4 days ago has a proposed total depth of 2,200 metres and is anticipated to take a total of 34 days to reach that depth.
Pancontinental Oil & Gas NL retains a fully carried interest of 6.875% through the drilling, evaluation, completion and testing of this exploration well which has an estimated dry hole cost of US$ 3.4 million (US$4.3 million tested).
Pancontinental is encouraged that Shell is positioning itself with respect to the possible development of Fuga at the beginning of the initial exploration well and interprets the agreement as reflecting both confidence in the drilling and indicative of the potential rewards that may flow from any success.
Enquiries:
Karen E V Brown, Joint Company Secretary
Tel: 08 9227 7178
Fax: 08 9227 9079
Email: svalbe@pancon.com.au
