Philippines: First Oil Flows at Tindalo-1 Well

Kairiki Energy Limited  announced that Nido Petroleum Limited , as Operator of Service Contract 54A (SC 54A), advise that first oil flowed to surface at 11:00am (Manila time) on 30 May 2010 from the Tindalo-1 well.

This follows the conclusion of well completion operations on the Tindalo-1 oil well earlier this week and final hookup and function testing of the surface production equipment.

In line with Tindalo’s Plan of Development, an extensive drill-stem testing programme (DST) will be conducted to enable reservoir fluid and crude assay sampling and to assess the production performance of the well over a range of production conditions to determine the well’s initial production capability. Nido will provide a further update on the testing results when available.

SC 54A Working Interests

– Nido Petroleum Philippines Pty Ltd – Operator: 42.4%

– Yilgarn Petroleum Philippines Pty Ltd (Kairiki): 30.1%

– Trafigura Ventures III BV (Trafigura): 15.0%

– TG World (BVI) Corporation (CVE:TGE) (PINK:TGWEF): 12.5%

Kairiki Energy Limited Corporate Profile

Kairiki Energy Limited (ASX:KIK) (PINK:KAIRF) is an Australian Based junior international oil and gas exploration company focused on the Philippines. Kairiki holds a 30.1% interest in Service Contract 54A and a 40% interest in Service Contract 54B.

SC 54A measures 862 km2 and contains the Tindalo, Yakal, Nido 1X1 and Signal Head oil discoveries and a substantial portfolio of similar low-risk reefal prospects. In December 2009, Kairiki announced that the SC 54A Joint Venture had approved the development of the Tindalo field with first oil expected in 2Q 2010 and an expected initial oil production rate of between 7,000-15,000 barrels of oil per day (2,450 – 5,250 bopd net to Kairiki.) The Tindalo development utilises a jack-up rig and a dynamically positioned storage vessel. Based on a successful development at Tindalo a number of follow-up developments may be considered in SC 54A.

SC 54B measures 3184 km2 and contains the Gindara prospect which has a mean unrisked oil in place volume estimated by the Operator, of 634 million barrels. The Gindara prospect is a very large simple four-way closure at the Top Nido Limestone reservoir objective with an areal extent of 28 km2, a vertical closure of over 300m and is well located to receive hydrocarbon charge from the Palawan Trough. Kairiki is seeking to farm down its interest in SC 54B to accelerate drilling of the Gindara prospect.

About Nido Petroleum Limited

Nido Petroleum Limited is an oil and gas exploration and production company with over 2,945,000 hectares (29,450 sq km) of contiguous exploration and development assets in the North West Palawan Basin in the Philippines. Nido is a leading explorer in the North West Palawan basin and the company’s exploration portfolio extends across both of the shallow (<100m) and deepwater (>1,200m) sectors of the North West Palawan continental margin which provides it with a diverse range of potential exploration and development projects in the Philippines premier producing basin. Nido operates SC 54A (42.4% interest), SC 54B (60% interest) and SC 58 (*50% interest). Nido also has a 50% non-operated interest in SC 63.

Nido’s core producing asset is the Galoc oil field of which Nido has a 22.879% non-operated interest. Galoc lies within SC 14 in 300 metres of water, some 60 km offshore Palawan Island. First production commenced 9 October 2008 through a simple two-well sub-sea development concept tied back to a moored FPSO.

In 2008, Nido completed a successful two well exploration program in SC 54A which resulted a 100% strike rate yielding the Yakal-1 and Tindalo-1 oil discoveries. Nido is currently working to augment Galoc production by fast-tracking the development of the Tindalo field with first production planned for 2Q 2010.

About Kairiki Energy Limited

Kairiki Energy is a Perth based company listed on the Australian Stock Exchange. Kairiki’s corporate strategy is to acquire oil and gas interests in proven oil and gas basins. Currently, Kairiki has oil and gas interests in the Philippines, Tunisia/Italy and Romania. Kairiki has assembled a very experienced Board of Directors and management team to achieve its objectives. The Directors have over 70 years experience with major oil and gas companies working the world’s major petroleum basins.

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Source:Kairikienergy, May 31, 2010;