Nido Petroleum Limited announced contracts have been executed for a drilling rig and subsea trees for the development of the Galoc Oil Field.

The rig contract is for three wells (two firm wells plus an option well). The Galoc development wells will be drilled using the Energy Searcher, a drillship managed by Jet Drilling and is expected on-site in June 2007. Subsea trees have also been secured for refurbishment and use in the development.

The Galoc Field is situated in Block C of Service Contract 14 (“SC 14”), in the North West Palawan Basin, offshore Philippines. The field is located approximately 70 km west of Culion Island in a water depth of approximately 290 metres. Nido holds a 22.279% working interest in the field which is operated by the Galoc Production Company (“GPC”). Two exploration and appraisal wells were drilled in the Galoc Field during the 1980s and produced over 385,000 barrels of oil during an extended production test in 1988.

The first phase of the Galoc development will be two subsea horizontal wells connected via a seabed flowline and riser system to a Floating, Production, Storage and Offloading Facility (FPSO). First oil is scheduled to be achieved in 4Q 2007. Nido expects highly productive horizontal wells, with each initially capable of producing up to 15,000 bopd. In order to maximise oil recovery, total field production rate will likely be controlled to an initial production plateau of approximately 17,500 bopd for 12 to 24 months.

Field data gathered during drilling and the initial production will represent an important appraisal activity which will lead to a better understanding of the field and the upside reserves potential. The development design has the flexibility to tieback additional wells to the FPSO in the event of a substantial increase in estimated recoverable volumes.

Bryce Martin, President Nido Philippines said “The Energy Searcher will be the first offshore rig in the Palawan in 6 years and heralds a revival in the Philippines oil industry. Execution of these contracts is a major milestone for the Galoc Project. These are the first significant contracts to be placed following the approval of the Plan of Development by the Philippine Department of Energy.

Galoc will be the first offshore field to be developed since the nearby Malampaya gas development in 1998 and at 17,500 bopd will represent approximately 7.5% of national oil imports and a doubling of the country’s current oil production.”