Tap Oil of Australia will invest $18.6 million to drill a wildcat well at the Sandakan basin this year or in 2011.
Tap Oil said in a company update that the Sandakan basin could contain 100 million to 200 million barrels of oil.
The Sandakan basin is covered by service contract 41, an area of approximately 4,820 square kilometers with water depths ranging from 200 to 2,000 meters off the Sulu sea.
Tap Oil managing director Peter Stickland earlier said the company was bullish on the potential of the Sandakan basin in the Sulu Sea. Tap Oil’s exploration contract is near ExxonMobil’s service contract no. 56, also in the Sandakan Basin. Exxon is set to drill a third well in the area.
“Service contract 41 is located in the Sandakan Basin in which there have been a number of sub-commercial hydrocarbon discoveries, including oil recovered from a well on-trend with a number of our prospects,” Stickland said.
He said Tap Oil drilled the Lumba Lumba-1 well last year “that intersected some thin hydrocarbon zones of a sub-commercial nature.”
The company, which operates SC 41 with a 50-percent stake, is currently reprocessing a large 3D seismic survey on the block.
Tap Oil earlier said the Lumba Lumba-1 prospect was of “moderate risk” with an estimated recoverable reserves of 50 million to 150 million barrels of oil.
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