The North Cebu Block or SC 40 is located in the Visayan Basin in the central part of the Philippine Archipelago. The licence area covers the northern part of Cebu Island and the adjacent offshore areas in the Central Tañon Strait and Visayan Sea. The DOE considers the basin as among the most prospective in the country, next only to the producing Northwest Palawan Basin.
The block was originally awarded as Geophysical Survey and Exploration Contract (GSEC) No. 69 to a consortium led by Forum Pacific, Inc. (FPI). The concession was subsequently converted to a service contract, SC 40, on 19 February 1995. In November 1997, FPI transferred its interest in SC 40 (Cebu) to Forum Exploration, Inc (FEI), at that time a wholly-owned subsidiary of FPI. In April 2003, ForumEnergy, through a subsidiary, acquired from FPI 66.67% of the issued shares of FEI.
The original term of the Exploration Period of the service contract was for seven years from 1995. In September 2003, FEI extended the contract a further three years, with DOE-approved work programme commitments for each year. On 25 November 2005, SC 40 entered the Production Period following the signing of the Joint Determination of Commerciality on Libertad Gas Field. This automatically extended its term for 25 years and deferred the company’s commitments for the last few years under the Exploration Period. In addition, a Libertad Production Area totalling 80 square kilometers was approved.
In 2013, PGS produced an Oil & Gas Competent Person's Report covering the whole block. Estimated in-place contingent resources is 14.1 mmbbls from the Maya and Toledo prospects, while prospective resources is 644.2 mmbbls from the other prospects and leads. In 2014, a block-wide Geological and Geophysical (G & G) studies were carried out to identify and prioritize highly prospective areas for future exploration.
In 2016, Forum was asked to relinquish 25% of the original contract area as part of the mandatory relinquishments under the service contract. As a result, SC 40 now covers an area of 3,400 square kilometers.
The Libertad Gas Field is situated in Bogo City, north of Cebu City. The field was discovered in the late 1950s but was not developed. In 1993, a testing program was carried out on two wells and from 1994 to 1995, five additional wells were drilled in Libertad. One of these wells tested gas and was subsequently completed as a gas producer.
In 2004, Forum carried out a feasibility study to determine the most commercially viable option for the development of the field. The results of this work recommended a development plan using gas-to-electricity generators with a maximum capacity of 3.0 MW.
In 2009, a Gas Sale and Purchase agreement was signed with local company Desco Inc. to generate power on-site. Forum’s role was limited to supplier of natural gas, with Desco as the buyer. Desco, in turn, shall sell the generated electricity to the Cebu Electric Cooperative (Cebeco II) under a Power Supply Agreement. In 2011, construction works were completed and a 1MW GE Jenbacher engine was installed at the power plant facility. In February 2012, commercial gas production officially commenced with initial production rate at 240,000 cubic feet of gas per day.
As at 31 December 2016, the field has produced 208.9 million cubic feet of gas. The production well has been shut since August 2015 due to rapid decrease in pressure. A plug and abandonment (P & A) program for the Libertad 95-1 well is currently being prepared in coordination with Desco Inc. The P & A shall be implemented in 1H 2017.
The Maya area is located on the northeastern tip of Cebu Island. It was first tested in the 1960s to 1970s by a number of companies, including Chinese Petroleum Corporation, which drilled an oil discovery, CMB-2, in 1972.
Forum drilled a further three wells in 2003 one of which, Forum-2X, encountered multiple oil and gas-bearing zones. However, the well was suspended without proper testing due to mechanical problems. The Company believes that Forum-2X well has signified the presence of a hydrocarbon system in the SC 40 (Cebu) licence, and they intend to re-enter the well, undertake a work-over, and test the flow rate.
The Toledo area, located west of Cebu City, is the site of documented oil seepages and of several wells that flowed oil. Both the Maya and Toledo prospects have Miocene sandstones as the primary target. Additional exploration activities will be undertaken to further study these prospects with the objective of finding commercial quantities of oil. PGS have estimated the two prospects to have total contingent resources of 14.1 mmbbls, which could still be commercial due to their onshore location and shallow reservoirs.
In addition to Maya and Libertad, SC 40 (Cebu) includes a number of prospects and leads. The Tambongon prospect is located within the Tañon sub-basin of the Visayan Basin offshore west Cebu and has both clastics and limestones as reservoir targets. PGS have calculated that the Tambongon has 456 mmbbl of prospective resources (Best Estimate).
The Jibitnil Island prospect is in the Tañon Strait with possible multiple targets in the Upper Oligocene to Upper Miocene sections. PGS have estimated 38 mmbbls of prospective in-place oil resources for this prospect, which could be drilled on Jibitnil Island.
Other prospects and leads within the SC 40 (Cebu) acreage include Sabil Point, Batbatan, Central Tañon, and Agojo.
Forum conducted onshore gravity surveys in Toledo and Maya areas in 2009 and in the Bogo, San Remigio, Medellin, Tabogon, and Daanbantayan areas in 2012-2013. In early 2017, another gravity survey was conducted to investigate an apparent structure in San Remigio, which was observed from the results of the previous survey. Forum also reprocessed a number of onshore and offshore 2D lines in preparation to a block-wide re-evaluation of SC 40. The aim of the study is to generate prospects for drilling.