Frontier Oil to drill ₱5 Billion Palawan Calauit Field and Cagayan wells in Q1 2014

The initial public offering (IPO) of Frontier Oil Corp. will transform the company from an explorer into a producer as it aims to drill two offshore wells in the Calauit Field by end of first quarter next year, a company executive said.

"What we're trying to do with this IPO is transforming the company from an explorer into a producer," president Kristoffer Fellowes told reporters in an investors' briefing late Monday.

"If we're successful, we'll be producing in the first half of 2014 by way of extended well test initiative and that is in Calauit Field," he said.

Discovered in 1991 by Petrocorp Exploration Philippines Ltd., Calauit Field is part of service contract (SC) 52 in offshore northwest Palawan and is Frontier Oil's most mature projects.

"We're still firming up specific dates [for the drilling] but it will be towards the end of first quarter 2014," Fellowes said.

"As soon as we finish drilling, we'll have a revenue stream. It's been in production before so we have assessments that it is bankable, with 5,000 barrels per day for 2.5 years of revenue stream based on independent assessment," he added.

According to Gaffney Kline & Associates, Calauit Field is estimated to have a net present value of 3.8 billion to 5.91 billion.

Fellowes said two horizontal wells will be drilled separately.

"We will have simultaneous operations... with the first well... It will be drilled for 30 days and will proceed to production... Then the second well will be drilled," he said.

On Oct. 25, the Philippine Stock Exchange approved the 2.2 billion IPO of Frontier Oil covering 883.626 million primary common shares at P2.50 apiece.

The offer period is set for Nov. 25 to Nov. 29, with a listing date on Dec. 9., according to a PSE memorandum.

Of the IPO proceeds, 276.88 million will be used for SC 50. Frontier Oil will also use 1.5 billion to drill in SC 52 in the onshore Cagayan Basin by December.

Frontier Oil holds interests and rights to interests in four of the 26 active exploration service contracts

Currently in place with the Department of Energy, with SC 50 and 52 as the two most mature or production-ready projects, according to the company. - GMA News

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