Sacgasco Limited has successfully reduced costs and minimised risks associated with drilling in the energy-rich waters offshore of the Philippines.
Through a deal with Blue Sky International Holdings, Sacgasco will receive Overriding Royalties from any future production of oil and gas from all the Nido Service Contracts, while still retaining the potential for significant future benefits.
As part of the agreement, Sacgasco has sold its Philippines Subsidiaries (Nido) but retains the option to participate in future SC 58 drilling of large-scale targets, including Balyena.
The deal also includes a sweetener of US$700,000 and a bonus payment of US$1.8 million upon achieving production from Cadlao Oilfield drilling and EWT in early 2023.
Sacagaso will receive a sliding scale overriding royalty on oil and gas sales from all Nido Service Contracts, which will continue even after the first oil.
Andrew Childs, the Chairman of Sacgasco, is confident that despite its subsidiaries being sold, the company will continue to have a significant role through a Technical Advisory Role and a mutual right to participate in new ventures in The Philippines for the next three years. Additionally, Sacgasco is currently seeking near-term drilling options in its Alberta and California Areas of Operations and exploring new growth opportunities in other ventures.
The Company is targeting supply to the local Californian and Canadian oil and gas markets and the burgeoning Asian market,” Mr Childs said.
“Sacgasco is evaluating both acquisition and sales of oil and gas producing and exploration assets to enhance the Company’s strategic needs.”
The transaction will take effect on July 31, 2023, while the anticipated closing date is August 15, 2023.