SC 55 placed under force majeure – DOE

Danessa Rivera (The Philippine Star) - May 15, 2021 - 12:00am

MANILA, Philippines — The Department of Energy has placed Service Contract (SC) 55 offshore West Palawan under force majeure, recognizing the adverse impact of the COVID-19 pandemic on the upstream industry.

In a disclosure to the Philippine Stock Exchange yesterday, ACE Enexor Inc. said the DOE approved the request of Palawan55 Exploration & Production Corp. to declare a one-year force majeure on the oil and gas prospect.

Palawan55 is the operator of SC 55 with a 75 percent stake in the project. It is 75 percent owned by ACE Enexor and 25 percent owned by AC Energy Corp.

“The letter also states that the timeline of the SC 55 appraisal period will be adjusted accordingly, and the end of the period will be adjusted by the same amount of time that SC 55 was on force majeure,” ACE Enexor said.

In a separate disclosure, Pryce Corp. said the DOE’s approval would allow the SC 55 consortium more time to conduct drilling in the prospect.

“This approval will extend the consortium’s work program schedule by up to another year and enable the consortium to better plan and steer through any unforeseen and unpredictable consequences of a prolonged COVID-19 pandemic,” it said.

Pryce, through subsidiary Pryce Gases Inc., owns the remaining 25 percent stake in SC 55.

In April last year, the DOE confirmed that the “Hawkeye-1 well did encounter a significant volume of movable natural gas and is deemed to be a non-associated gas discovery under Section 13.02 of SC 55. Non-associated gas discovery means the reservoir contains only natural gas and no oil.

On April 26, 2020, the DOE confirmed the entry of SC 55 into the appraisal period, premised on the drilling of at least one well within the first two years. SC 55 was estimated to have some 2.2 trillion cubic feet of gas, according to the DOE.

Three months later, the SC 55 consortium submitted to the DOE its five-year work program and budget for the appraisal period of $1.7 million.

The work program consists of a firm commitment in the first two years and a contingent commitment covering the latter three years.

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