Sacgasco’s Chairman Andrew Childs commented:“The agreement to...

Sacgasco’s Chairman Andrew Childs commented:
“The agreement to remove the direct risks of drilling in the offshore Philippines while retaining material future
potential benefits for Sacgasco was compelling. It provides upfront cash, a cash bonus on first oil from Cadlao
drilling and Overriding Royalties from any future production of oil and gas from all the Nido Service Contracts.
I am aware there is often some confusion over the calculation of Overriding Royalty. The following is an example:
If the applicable net oil production rate is 3000 BOPD and oil sales price is US $70 per BO then an overriding
royalty of 3% would realise US$ 6,300 per day.
This agreement, when implemented, reduces Sacgasco’s imminent capital requirements and associated drilling
risk. The future potential cash and royalty benefits from Cadlao alone can reasonably be estimated to be more
than Sacgasco’s current market capitalisation.
The agreement also provides Sacgasco with an option to participate on a ground floor basis in any Nido
Philippines new ventures, and more importantly to participate in the any future drilling in the SC 58 area on
the same basis as Nido. SC 58 has always been, and continues to be, the most exciting opportunity for our
shareholders in the Philippines.
The sale of Nido will enable Sacgasco to refocusits search for growth assetsthat can make a greater contribution
to near term shareholder value.
The Operator of the Deep Venture Drillship has advised that the drilling rig is anticipated to be ready to drill the
Cadlao 4 well by January 2024.
The availability of the Deep Venture rig in the Philippines is important because it has the flexibility to drill in
shallow and deeper water using anchored to dynamically positioned modes. This flexibility covers many of the
requirements of Offshore Philippines oil and gas operations, and particularly Nido’s future drilling needs!”