Nido production rises

JUNIOR oil producer Nido Petrol-eum NL has reported increased crude production with an on-going cash contribution of about $300,000 to $400,000 per annum from its SC 14/SC 6B prospects in the offshore Palawan Basin, Philippines.

Nido’s SC 14 interests include the Nido and Matinloc producing fields and facilities in Palawan, a tertiary basin on the eastern margin of the South China Sea.

A significant feature of second quarter activity was the negotiation of a crude sales contract with Caltex, which allowed the Nido field to be returned to production.

In the past, Nido has considered production from Nido and Matinloc fields as being breakeven and of no value in terms of net cash flow to Nido. Based on production to June 30, Nido has now accrued net cash flow of about $700,000.

The company’s quarterly reports that, should recent production and crude price trends continue, Nido can expect an ongoing cash contribution from production of 1,400 barrels of oil per day.

A number of parties have expressed an interest in the Galoc prospect in SC 14 and Nido is pursuing farmout terms with these parties to reprocess 3D seismic and drill a well to confirm the economic attractiveness of the prospect.

The company is also pursuing opportunities to drill Coron North, 20 kilometres north of the Nido fields.

Coron North lies on the same trend and adjacent to the Camago and Malampaya fields that the giant Shell/Texaco joint venture is developing at a cost of $4 billion, and is one of the few large structures in the area yet to be drilled.

n The writer holds shares in Nido.