Red tape blocks investors

Investors hoping to invest in what could develop as a major gas and oil field in the Philippines have been stymied by Australian Stock Exchange bureaucracy.

After a lengthy delay, the Fuga#1 exploration well spudded on Fuga Island at the beginning of this month targeting three potential reservoirs with combined potential recoverable estimated reserves of 5.240 billion cubic feet of gas.

The prospect has been described by stockbroker HSBC Securities analyst Ann Diamond as a “high risk, high reward” play.

The local agency, Philippines National Oil Company, is operator of the GSEC 84 licence, which covers 8,300 square kilometres off northern Luzon Island.

This includes Fuga Island, located thirty kilometres from the mainland and about 600km from Manila.

Meanwhile, junior hydrocarbon explorer Stirling Resources NL has diluted its shareholder in GSEC 84 to 6.25 per cent.

Ironically, Stirling has taken a new tack in its operations and entered into an agreement to acquire the issued capital of AutoNet.Com, conditional on shareholder approval.

This has resulted in Stirling being suspended on the bourse by the ASX.

Punters who might want to invest in the Fuga play by entry through Stirling have therefore been left out in the cold.

Now this potentially major hydrocarbon play has raised some exciting prospects for some and a dilemma for other.

Drilling on the prospect, reported in the Philippines as hosting a major field, was delayed for more than twelve months by the owner of the island, and access was only granted after court action was initiated.

According to a report by Hardman Resources NL – which holds 5.63 per cent equity in the prospect – Fuga Island has been shown by seismic data and surface geological mapping to be the surface expression of a very large anticlinal structure with an areal closure of over 100 sq/km.

The $4 million Fuga#1 well is being drilled on the island, which is the crest of the anticline.

The proposed depth of the well is 2,200 metres and should take thirty-six days to drill.

Perth-based Nido Petroleum Ltd – which is developing its own oil production project in China – holds a 2.5 per cent stake in Fuga#1 after farming out 75 per cent of its interests in the permit to PNOC-EC.

In its last quarterly, Nido report-ed that work completed by PNOC showed potential for the prospect to host five trillion cubic feet of gas or 1.3 billion barrels of oil.

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