Australian exploration firm issues P1-B bondsadmin
Monday, August 14th 2006
Australian firm Nido Petroleum Limited has issued over P1-billion worth of five-year convertible bonds to Hongkong-based Merill Lynch Corporate Principal to partly infuse its cash needs for programmed exploration activities in the Philippines.
In its disclosure at the Australian Stock Exchange, the company stated that it reached a deal with Merill Lynch for a $ 22 million unsecured, unsubordinated convertible bond which would be falling due on August 2011.
The convertible bonds will be unlisted and carry a coupon rate of 8.5 percent per annum, and will be payable quarterly. For the first 18 months, interest will not be payable but will accrue.
It was stipulated in the disclosure that the initial conversion price is set at A$ 0.26 per ordinary share, taking in a 30 percent premium to the volume weighted average price of Nido’s shares for the 20 trading days immediately prior to transaction date of August 9, 2006, and is subject to adjustment.
“The convertible bonds will allow Nido to fund the growth of its exploration and development projects in the Philippines. We are very pleased that Merrill Lynch has chosen to invest in Nido and to participate in our future growth and success,” said Nido Petroleum chief financial officer Gillian Evans.
With the array of existing interests it has cornered in various exploration areas offered by the Philippine Department of Energy, Nido Petroleum now stands among the key players in the oil and gas upstream sector in the country.
Among the blocks where it holds operating interests are in northwest Palawan covered by Service Contracts 54 and SC 14. It currently has 5,376 square kilometers acreage.
Just last week, the company announced that it is set to start drilling at its Galoc oil field development prospect in NW Palawan, after securing a rig contract called the “Energy Searcher” from Jet Drilling, for the three wells that will cover its extended production test.
Should reserves yield positive indication to advance to commercial development, it is expected that the first oil will flow by the fourth quarter of 2007.
The initial assessment was that the production volume from the oil field will hit 17,500 barrels of oil per day; and this may account for 7.5-percent of the country’s oil imports.
The Galoc field is situated in Block C of SC 14, and is approximately 70 kilometer west of Culion island in Palawan, in a water with 290 meters depth. Nido Petroleum currently holds 22.27-percent working interest in the project , which is operated by Galoc Production Company.
Two exploration and appraisal wells were already drilled in the Galoc field in the 80s; and produced over 385,000 barrels of oil during an extended production test in 1988.
The Aussie firm emphasized that the first phase of the Galoc field development will be two subsea horizontal wells connected via a seabed flowline and riser system to a floating, production, storage and offloading facility.
Field data gathered during drilling and the initial production, the company said, will represent an important appraisal activity which will lead to a better understanding of the field and the upside reserves potential.