PXP Energy Corporation

Block A North Recto Bank (Nominated Area No. 6)

PXP Energy Corporation: 100%

Block A is located north of and contiguous with SC 72 in offshore NW Palawan and some 180 to 375 km from Palawan Island. It covers all of Nares Bank and parts of the greater Recto Bank, with an area of 14,300 sq. km. The water depth across the block broadly ranges from 20 m to 2,500 m. Apart from a few academic studies using mostly potential fields of geophysical data and the legacy Joint Marine Seismic Undertaking (JMSU) 2D dataset, which is unavailable to PXP, there are no recent subsurface data in Block A. The closest relevant subsurface information in Block A comes from SC 72, with Reed Bank A-1 and B-1 wells located in the northern part of SC 72.

On September 14, 2020, the DOE opened the bid submitted by PXP in March 2020 and found the application documents complete and thus qualified to undergo further substantive (legal, technical, and financial) evaluation. The application remains under process with the DOE.

Once a Service Contract is granted, the proposed work program for the first sub-phase will include the acquisition of at least 2,200 line-km of 2D seismic data, as well as marine gravity and magnetic data.

Sulu Sea Basin (BARMM PDA-BP-2)

PXP Energy Corporation: 12.5%

PDA-BP-2 is located in the southwestern part of the Sulu Sea Basin about 200 km from the coast of Borneo. It has an area of 7,800 sq. km and water depths ranging from 200 to 3,000 meters in the east of the block. It is among the blocks offered in early 2024 by the DOE and the Ministry of Environment, Natural Resources and Energy (MENRE) of the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) under the 1st BARMM Conventional Energy Bid Round. Within PDA-BP-2, ExxonMobil, together with Mitra Energy and BHP Billiton, drilled four wells in deeper water areas from 2009 to 2010. Two of these wells, Dabakan and Palendag, are significant gas discoveries.

On August 27, 2024, PXP along with its partners, Triangle Energy (Global) Limited, Sunda Energy Plc, and The Philodrill Corporation, submitted its bid documents to the DOE and the MENRE. The application was found to be complete and, therefore, qualified for further substantive evaluation. The final decision on the application is expected to be released in December 2024.

Once a Service Contract is granted, geologic and geophysical studies will be conducted, including the PSDM reprocessing of existing 2D and 3D seismic data.

Sulu Sea Basin (BARMM PDA-BP-3)

PXP Energy Corporation: 12.5%

PDA-BP-3 is located south of PDA-BP-2 and is also among the blocks offered for bidding in early 2024. It has an area of 5,321 sq. km and water depths ranging from less than 100 m in the west to an excess of 3,000 m in the east. The block is covered by 2D and 3D seismic data with seven wells drilled by previous operators. While there are no commercial discoveries yet in PDA-BP-3, hydrocarbon indications were recorded in some wells. Multiple leads have also been identified by previous operators.

On August 27, 2024, PXP along with its partners, Triangle Energy (Global) Limited, Sunda Energy Plc, and The Philodrill Corporation, submitted its bid documents to the DOE and the MENRE. The application was found to be complete and, therefore, qualified for further substantive evaluation. The final decision on the application is expected to be released in December 2024.

Once a Service Contract is granted, geologic and geophysical studies will be conducted, including the PSDM reprocessing of existing 2D and 3D seismic data.

Octon Block (Nominated Area No. 10)

PXP Energy Corporation: 6.8439%

Forum Energy Philippines Corporation: 6.8439%

The former SC 6A block covered an area of 1,080 sq. km and contains the Octon Field.

In 2018, Philodrill completed a 3D seismic interpretation work on the northern sector of the block that focused on the Malajon, Salvacion, and Saddle Rock prospects. This was followed by a seismic attribute analysis of the Galoc Clastic Unit (GCU) interval which was undertaken in 2019. The Malajon and Saddle Rock closures were previously tested by wells that encountered good oil shows in the GCU. However, no drill stem tests were conducted in this interval due to operational constraints.

In 2020, a pilot study on the Malajon area was completed using 3D seismic and well data. The study showed the Malajon structure has good hydrocarbon potential, thus requires further analysis. A detailed Quantitative Interpretation Study was approved by the Joint Venture aimed at generating pay probability maps and identifying prospective zones that could be targets for future wells. It also included detailed attribute analysis as several channelized sands within the GCU have been identified during the pilot study. The study was completed in December 2020.

The original term of SC 6A was set to expire on February 28, 2024, which gave the JV limited time to drill an exploratory well and to develop a field in case of a discovery. In view of this, the Consortium decided to surrender the contract effective March 31, 2021, and, upon its approval by the DOE, to apply for a new contract under the Philippine Conventional Energy Contracting Program (PCECP) on area nomination. The surrender of the SC was approved by the DOE on September 5, 2022

On March 17, 2023, Philodrill submitted to the DOE the bid documents for the application for the new SC, which has now been termed Nominated Area No. 10 by the DOE. PXP and FEPC will each have a participating interest of 6.8439% each in the new SC.

On June 26, 2023, the DOE sent a Notice of Qualification of the Consortium to Enter a Petroleum Service Contract for Nominated Area No. 10 to Philodrill. The JV has since signed the SC and is awaiting the signatures of the Secretary of the DOE and the Philippine President for the awarding of the SC. It will have an area of 1,400 sq. km, which includes the former SC 6A and additional areas relinquished from the adjacent SC 74 in 2022.

Upon award of the SC, the first sub-phase will focus on further subsurface works aimed to establish a final well location and well design for the Malajon Prospect and to appraise the Octon Discovery.

Cadlao Block (Development and Production Service Contract)

Forum Energy Philippines Corporation: 2.4546%

SC 6B had an area of 567 sq. km and contains the Cadlao Oil Field.

In late 2021, Nido Petroleum, a member of the Consortium, submitted a farm-in proposal to increase its participating interest from 9.09% to 72.727% and take over the operatorship of the block. Under the proposal, Nido will fund 100% of the drilling, extended well test (EWT), and subsequent development of the Cadlao Field in return for the additional interest. A farm-in agreement (FIA) was later executed on February 11, 2022.

Nido proposes a two-phase re-development consisting of:

• Phase 1: A 3 to 9-month EWT using a new single deviated well (Cadlao-4), a mobile offshore production unit (MOPU), and either a floating storage and offloading (FSO) vessel or a shuttle tanker; and
• Phase 2: Further development of the EWT well and additional wells potentially substituting the MOPU for a small wellhead platform (WHP) and storage barge.

From November 28 to December 1, 2022, Nido conducted a geophysical site survey at Cadlao using the vessel, Cassandra VI. The survey aimed to identify the possible constraints and hazards on the seafloor where the Cadlao-4 well will be located.

On December 19, 2022, after Nido and the JV completed the necessary actions and submitted the required documents, the DOE approved the transfer of operatorship of SC 6B to Nido.

On January 5, 2024, the SC 6B Consortium sent the DOE a letter of intent to apply for a Development and Production Petroleum SC (DP PSC) before the end of the SC 6B production term. The new SC will replace SC 6B, which will expire on February 28, 2024.

On January 26, 2024, Nido submitted the application documents for the SC 6B block and additional open areas. These documents include a copy of the Plan of Development (POD) for the Cadlao Field. The Consortium is now awaiting the government’s final decision on its application.