- Sacgasco (SGC) trades lower today despite announcing two contract extensions for exploration service contracts in the Philippines
- The company has secured the extension for Service Contract 58 (SC58) and Service Contract 54, Block A (SC54A) from the Philippines’ Department of Energy
- Managing Director Gary Jeffery says these service contract extensions give the company a “good platform” to move forward with exploration plans in both blocks
- The extensions were secured through Sacgasco subsidiary Nido Petroleum Philippines
- Shares in Sacgasco were down 2.86 per cent to trade at 3.4 cents each at midday AEDT
Oil and gas explorer Sacgasco (SGC) is trading lower today despite announcing two contract extensions for exploration service contracts in the Philippines.
The company today said in an announcement to the ASX it had, through its subsidiary Nido Petroleum Philippines, secured the extension for Service Contract 58 (SC58) and Service Contract 54, Block A (SC54A) from the Philippines’ Department of Energy.
According to Sacgasco, the extensions were granted primarily for reasons relating to COVID-19.
Managing Director Gary Jeffery said these service contract extensions gave the company a “good platform” to move forward with exploration plans in both blocks.
“Exploration prospects in both SC58and SC54A, as well as existing discoveries in SC54A, are being evaluated for identification and ranking of preferred drilling targets, thus accelerating near term cashflow opportunities for the company,” Mr Jeffery said.
Nido, SGC’s Philippino subsidiary, acts as the operator of, and holds a 50 per cent interest in, SC58.
Nido is paying all minimal extension costs under the current service contract until the Sub Phase 3 step of the exploration process is complete.
Sacgasco said it expected this phase to restart on October 16, 2022, at the earliest, or whenever COVID-19-induced restrictions in the Philippines lift after this date.
Nido will need to commit to a Sub-Phase 3 well in the area within 216 days after the restart of Sub Phase 3.
SC58 covers 13,440 square kilometres in the northwest Palawan Basin. Sacgasco claims the area is one of the last undrilled deepwater play fairways in South-East Asia.
As for SC54A, Nido holds a 42.4 per cent interest in and operates the service contract, while another Sacgaso subsidiary — Yilgarn Petroleum — holds a 30.1 per cent interest. This effectively gives SGC a 72.5 per cent interest in the contract.
The Sub-Phase 6 of SC54A has now been extended to August 5, 2022, with all commitment having been fulfilled for this sub-phase. Following the completion of Sub-Phase 6, Sacgasco can look to enter the next phase of the service contract, which will last for one year and include commitments for at least one exploration well.
SC54A covers a 550 square kilometre area in the Palawan Basin.
Shares in Sacgasco were down 2.86 per cent to trade at 3.4 cents each at midday AEDT. The company has a $14.7 million market cap.