AUSTRALIA-based Nido Petroleum Ltd. and its partner Kairiki Energy Ltd. said they have started site survey operations in Service Contract 54 (SC54) in northwest Palawan.

In a statement, Nido said the site survey is being undertaken in anticipation of drilling two firm wells with the WilBoss jack-up rig later this year in the shallow water area of SC 54.

Nido said the survey would also cover the deeper water Gindara prospect, which will be drilled in 2009.

In total, according to Nido, eight areas will be surveyed for potential hazards and shallow gas with both analog and digital grids to evaluate the sea bed and subsurface at possible drilling locations.

Nido further noted that an environmental baseline study will also be conducted as part of its health, safety and environment focus.

Nido said the site survey vessel Baruna Jaya has been contracted through Fugro Survey Pte. Ltd. and the work is scheduled to take four weeks, depending on weather conditions.

In May, Nido completed a share placement to sophisticated investors generating $41.25 million to finance its drilling program for SC 54 in northwest Palawan.

Nido said the share placement was jointly arranged by CLSA Asia-Pacific Markets and Merrill Lynch, which enabled them to strengthen and diversify their institutional shareholder base, including through the introduction of new funds from London, Singapore and Australia.

“We have been overwhelmed with the level of interest from investors who strongly support Nido’s strategy of accelerating its exploration activities, as shown by the share placement being well oversubscribed,” Jose Victor E.A. de Dios, Nido president and chief executive, said in a statement.

He added that investors have been excited of learning of the substantial value afforded by Nido’s exploration acreage, which represents an opportunity to take part in what is a unique story in the oil industry today: a large position in an underexplored hydrocarbon basin with significant identified oil-in-place potential in excess of 11 billion barrels (gross, unrisked) across Nido’s entire exploration portfolio.

With oil prices climbing to new heights each day, said de Dios, “this fundraising will enable us, once again, to seize the first-mover advantage by accelerating our exploration drilling program.”

Nido said the funds will be raised through the issue of 82.5 million shares at a price of $0.50 per share. The shares will be issued within the scope of Nido’s available share-placement capacity under ASX Listing Rule 7.1.

Settlement of the fundraising was anticipated to occur on June 2, 2008, with the quotation of the new shares on June 3, 2008. Upon quotation, Nido’s total issued share capital will be 1,050,314,774 shares.

On April 29, Nido announced plans to expand its drilling program in Service Contract 54 from one well to three wells. Nido and its joint-venture partner Kairiki Energy Ltd. budgeted to drill at least two shallow-water wells with a jack-up rig at the end of 2008, followed by drilling of the Gindara prospect in 2009.

Nido said  the purpose of the fundraising is primarily to initiate this accelerated three-well drilling program that will form the beginning of a larger-scale program to be conducted over the next five years.

Nido added that the current record oil prices of over A$130 per barrel provide an ideal environment for evaluation of this area with the aim of rapidly extracting maximum value from Nido’s Palawan Basin acreage.

Nido said the funds raised will ensure that Nido is well-positioned to secure drilling rigs and additional long lead time items for the increased drilling program in the current tight market conditions.

In addition to meeting SC54 drilling commitments, the funds raised from the share placement will be used to meet Nido’s working-capital requirements pending the receipt of Galoc revenues, which have been delayed by approximately 60 days, resulting in increased capital costs from initial budgetary amounts.

Nido is confident that, with hook-up and commissioning of the floating production storage and offloadig under way, further delays to the Galoc project are unlikely to arise, with first oil supposed to be expected in June.

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Nido, Kairiki Energy Ltd. start survey of Service Contract 54

AUSTRALIA-based Nido Petroleum Ltd. and its partner Kairiki Energy Ltd. said they have started site survey operations in Service Contract 54 (SC54) in northwest Palawan.

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