NDO 0.00% 9.8¢ nido petroleum limited

nido petroleum report

  1. 734 Posts.
    Some interesting snippets from the NDO half year report.

    Nido, (NDO), after charging intraday to 2.8c a week or two ago seems to have settled back to about 2.0-2.2c awaiting the decision (expected late September 2003) by Unocal as to whether to move to Phase 2 (essentially a bankable feasibility study) on the Galoc oil discovery. The current price is still a substantial improvement on the average over the past couple of months, which suggests that if the decision is not favourable, it could fall back somewhat. On the other hand, a favourable decision could mean some small multiple increase in the current price.

    Pagasa turbidite play (they say, 3D seismic is similar to Mauritania and Gulf of Mexico; and with amplitude bodies, but still requiring AVO modelling to firm up), if they can attract a farmin is the other major potential price mover for NDO.

    I hold.

    Page 6
    Galoc Field - 17.5% interest
    Late in 2002, Nido and the SC14 Joint Venture signed an agreement with Unocal to farm into the
    Galoc Field. The agreement provides for a three phase effort to be undertaken by Unocal. The
    first phase involves Pre Stack Depth Migration reprocessing of 225 sq km of 3D seismic, and
    geological and engineering studies to determine field reserves and commerciality. The second
    phase involves preparation of a “Plan of Development” for the field and will only be entered if
    phase 1 proves positive. The third phase is the actual development of the Galoc Field. Phase 1
    studies are likely to be completed in the third quarter of 2003.

    A “Plan of Development” is in effect a Bankable Feasibility Study. It is Nido’s view that if
    Phase 2 is completed the primary commerciality hurdle associated with the Galoc Field will have
    been overcome.

    The importance of Unocal’s involvement cannot be under estimated because of its track record in
    the region for low cost and innovative drilling and development projects. Unocal has the
    capability to carry out a development plan at low cost. Under the agreement, Nido has an option
    to participate in the various stages of the project at its 17.5% interest level or to farm down to
    4.375% with a full carry. Nido is participating in Phase 1 at its 17.5% interest.

    Nido's current depth map of the field indicates that there may be up to 50 million barrels
    recoverable at Galoc. Its potential has already been indicated by an extended production test
    carried out in 1989 where the Galoc-1 well flowed a total of 360,000 barrels of oil over an
    interrupted 6 month period. For more details please download the presentation from the website
    at www.nido.com.au.

    The PSDM seismic reprocessing has been completed in Perth. The remainder of Phase 1 which
    includes detailed mapping, reservoir modelling and engineering studies will now be undertaken
    in Houston, Jakarta and Balikpapan.

    Preliminary mapping indicates that the field is similar in size to the initial depth maps made by
    Nido. The areal extent of the field has changed in shape somewhat and the northern lobe appears
    to be higher in relief than the initial maps.

    Nido and Matinloc Oil Production – 17.5% interest
    Helix-RDS has finalised its review of the Nido and Matinloc Oilfields and has concluded that the
    production, at Nido in particular, has not been limited by the reservoir or lack of recoverable oil
    but by vertical lift constraints due to water loading in the tubing. This can be easily and cheaply
    rectified by installing jet pumps on selected wells to increase average daily production. This
    installation can be done using a wireline unit and there is no need for a drilling rig. It is very
    unusual for 20 year old fields such as Nido to still be operating without any form of artificial lift
    (whether it be gas lift, jet pumps or electrical submersible pumps).

    Nido has presented its work to the operator in Manila which is now carrying out analysis of
    projected production to determine requirements for additional transport prior to carrying out
    pressure testing of the selected wells followed by jet pump testing and final implementation.

    N I DO P E T R O L E UM L I M I T E D
    A N D I T S C O N T R O L L E D E N T I T I E S
    Page 7
    Nido 1X-1 (Nido Interest 17.5%)
    The Nido 1X-1 well was drilled in 1979 and tested oil at around 1,500 barrels of oil per day. At
    the time, the discovery was deemed to be too small to develop. Work conducted to date by Nido
    in reviewing the prospect indicates the likelihood of additional attic reserves. Reprocessing of
    the 3D seismic data will be required to fully appraise the potential.

    The Nido 1X-1 structure is within 2 kilometres (within drilling reach) of an existing production
    platform at Nido A, offering low threshold economics. It is partly in Service contract 42 and
    partly in Service Contract 14.

    Pagasa Turbidite Play (Nido Interest 17.5%)
    The Pagasa Turbidite system is similar in many respects to the gross depositional setting of the
    Cretaceous section of the north western margin of Africa (e.g. Mauritania). Both systems occur
    in similar geological settings with turbidite deposition being sourced from well defined
    submarine canyons. Preliminary body tracking performed by Nido demonstrates the existence of
    sinuous channels associated with higher seismic amplitudes’ reminiscent of sand prone turbidite
    channel forms seen along the western margin of Africa and indeed within the Gulf of Mexico.

    Preliminary viewing of the seismic data set also indicates the development of ponded mini basins
    behind areas of positive relief created by reef mounding and early structural inversion. These
    ponded mini basins by analogy with regions such as the Gulf of Mexico and Brunei tend to be
    sand prone, thus providing reservoir potential. They generally occur as a series of deposits
    building down the shelf slope. As each mini basin becomes overfilled subsequent sediment will
    spill or bypass to the next area of positive accommodation where sand prone sediment will then

    The existence of high amplitude bodies within the overall system provides encouragement for
    reservoir development and potentially the existence of hydrocarbons within these bodies. The
    potential for hydrocarbon fill associated with amplitude would need to be further investigated by
    AVO (Amplitude Versus Offset) modelling.
    Nido has begun a more detailed study with the aim of attracting a major oil company to explore
    the play.

    Pagasa Turbidite Play – 65.8% interest
    See section under SC14/6B

    During the half year Nido issued 87,434,135 June 2005 Options at an issue price of $0.004 per
    Option on the basis of 1 Option for every 3 shares held. These options expire on the earlier of:
    • 5:00 pm (WST) on 30 June 2005 or
    • 5:00 pm (WST) on that date which is 60 days following Nido’s ASX announcement that
    it will contribute towards it share of the cost of Phase 2 of the Galoc Project;
    In relation to the Option Expiry trigger event the Directors advise that the first stage of the Galoc
    farmin is continuing with Unocal having completed the Pre Stack Depth Migration processing on
    the 3D seismic data. The remainder of Phase 1 which includes detailed mapping, reservoir
    modelling and engineering studies will now be undertaken in Houston, Jakarta and Balikpapan.
    These studies are progressing slightly behind schedule however the Directors’ expect that Phase
    1 of the Galoc Project studies will be completed in the third quarter of 2003.
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