PXP Energy Corporation

Forum (GSEC 101) Limited (Operator): 70%

The Recto Bank concession, designated as SC 72, is located in the West Philippine Sea, west of Palawan Island and southwest of the Malampaya Gas Field. Originally awarded as Geophysical Survey and Exploration Contract (GSEC) No. 101, to Sterling Energy Ltd in June 2002, the block carried an initial two-year exploration term.

In April 2005, Forum Energy took over the concession from Sterling and assumed operatorship. In 2008, Monte Oro acquired a 30% participating interest in the block after reimbursing a portion of Forum Energy's historical costs and expenditures.

On 15 February 2010, the license was converted into a Service Contract (SC 72). Following the conversion, Forum Energy carried out additional geological and geophysical studies to further assess the block's hydrocarbon potential and to fulfill its commitment to the government. SC 72 now covers approximately 8,800 square kilometers, which is 85% of the original GSEC 101 contract.

Exploration

Exploration in the area began in the 1970s. In 1976, gas was discovered in the Sampaguita structure following the drilling of a well. To date, a total of three wells have been drilled at the southwest end of the structure, two of which tested gas at rates of 3.6 mmscf/d and 3.2 mmscf/d.

From mid-January to mid-March 2011, Forum Energy acquired 2,202 line-kilometers of 2D seismic, gravity, and magnetic data across SC 72 to further delineate exploration leads. In addition, 565 square kilometers of 3D seismic data were acquired over the Sampaguita field. These activities fulfilled the Joint Venture's commitment under the first sub-phase of SC 72.

The interpretation of these surveys was carried out by Weatherford Petroleum Consultants in 2012. Their report indicated that the Sampaguita Gas Field contains contingent resources of approximately 2.6 trillion cubic feet (TCF) of Gas in Place (GIP).

In 2023, the 2D seismic data were reprocessed and subsequently interpreted, supported by gravity and magnetic studies conducted by Fugro (2012) and Cosine, Ltd. (2015). In 2015, Arex Energy prepared a report on the North Bank area, estimating prospective resources of 3.1 TCF.

On December 15, 2014, SC 72 was placed under force majeure due to the West Philippine Sea maritime dispute. On October 16, 2020, Forum Energy received notice from the DOE that the force majeure had been lifted with immediate effect and that the Joint Venture was to resume exploration activities. The JV had 20 months from the lifting of the suspension to drill two commitment wells.

Forum Energy initiated preparations for drilling the two wells, including procuring long lead items, issuing requisitions for drilling materials, and engaging technical service providers. However, on April 6, 2022, just as a geophysical survey over the proposed drilling locations was about to commence, the DOE directed the company to "put on hold any exploration activities for Service Contract Nos. 72 and 75 until such time that the [Security, Justice and Peace Coordinating Cluster (SJPCC)] has issued the necessary clearance to proceed." In compliance with this directive, all activities were immediately suspended.

As the suspension order was deemed indefinite, Forum Energy submitted a letter to the DOE on April 11, 2022, formally declaring force majeure under SC 72 effective April 6, 2022.