1x1

Courtesy of the Philodrill annual report (Apr 30)

Nido 1X-1 Re-Evaluation and Development Studies

In 2012, the Company completed its in-house review and evaluation of the Nido 1X-1 discovery
and the potential of the nearby Nido A Field Attic, and the results were presented to the
consortium partners who gave approval for the conduct of further technical and engineering
studies leading to the drilling of new development wells on these structures. Early last year, the
Company undertook a formal tender process which aimed to solicit consolidated proposals for
various engineering activities associated with the drilling of appraisal/development wells on the
mentioned Nido carbonate reef structures, as well as a review of the existing production facilities at
the Nido AP platform. In June 2013, the Malaysia-based AWT International was selected over five
other companies that submitted tender bids.

Contractor AWT International and its partner IntecSea commenced work on the Nido 1X-1 project
in July with an ocular investigation of the Nido AP, AW and BW platforms, as well as the Pandan
and Libro facilities to assess usability of such facilities in case the Nido 1X-1 development pushes
through. From the gathered field data and information provided by the Company, the contractors
developed well designs and drilling programs for a development well on the Nido 1X-1 and another
well that will test the attic volume on the nearby producing Nido A structure. Overall, the AWT
studies indicate the viability of the project by employing the simplest development strategy for the
fields.

In moving forward with the Nido 1X-1 project, the Company engaged the services of the third party
consultant RISC Operations Pty Ltd. (RISC) of Australia for an independent reserves certification
and economics evaluation of the Nido 1X-1 and Nido A attic resources. By and large, the RISC
assessment results diverge significantly from the results of the Company’s in-house assessment
works. The divergence appears to have come from some of the critical parameters employed in
the RISC studies vis-à-vis the Company’s in-house assessment work, which has much bearing on
the computed resources and impact on the development plans for the Nido 1X-1 field and the Nido
A field attic. By end-December 2013, the Company was preparing for the conduct of petrophysical
review study to verify the discrepancies between the results obtained from the RISC work and the
Company’s in-house resources evaluation of both Nido carbonate features.