AsianOil: Sacgasco expands into Philippine upstream

Australian junior Sacgasco has expanded its upstream portfolio after acquiring interests in four licences offshore the Philippines from Thai energy conglomerate Bangchak.
Sacgasco said on July 5 that it had paid $1 for BCP Energy International (BCPEI), which wholly owns Nido Petroleum. Nido operates service contracts (SC) 54A with 42.4% and SC 58 with 50%, and also owns 22.88% of SC 14C2 and 2.7% of SC 6B.
Sacgasco’s new assets contain six existing oil discoveries, including the shut-in West Linapacan field in SC 14C2 that has redevelopment potential, as well as several “high impact” exploration prospects. The Australian company noted that there were no near-term commitments attached to the fields and that the associated administration costs were relatively low.
Sacgasco has begun evaluating the licences’ discovered oil resources with the hopes of realising early oil production from them. It added: “Potential development concepts that will allow them to be brought to production may include plans for three currently shut-in wells in the redevelopment of the West Linapacan Field and a potential parallel exploration programme.”
With the transaction having closed on July 1, the Perth-based developer now intends to rename BCPE as Sacgasco SG.
Sacgasco, which already has upstream interests in the US and Canada, said the Philippines’ “very attractive fiscal environment” as well as its “pro-active and engaged” regulator had encouraged it to enter the country.
The company highlighted growth opportunities stemming from both the country’s growing demand for natural gas as well as the decline of the giant Malampaya gas field, which is currently on track to run dry this decade. The deal, however, is not anticipated to affect the development of its North American assets.
Sacgasco chairman Andrew Childs said: “This is a significant acquisition for us, as it offers huge potential for a small, nimble company such as Sacgasco, in a country we know well. We have always viewed the Nido Petroleum Philippines assets as potentially very attractive, and we have moved quickly to take advantage of Bangchak’s decision that these assets are no longer core to their business.”
He added: “The existing undeveloped oil discoveries and the shut-in oilfield West Linapacan will be a focus of immediate resource assessment and development studies to maximise value in the current high oil price environment.”