ACE ENEXOR ASM SPEECH
2020 ANNUAL STOCKHOLDERS’ MEETING
MESSAGE FROM THE COO RAYMUNDO A. REYES, JR.
APRIL 20, 2020
Thank you, Mr. Chairman.
Good afternoon, fellow shareholders and guests.
Since the middle of last year when AC Energy took over ACEX, our team has focused on validating the gas discovery made at the Hawkeye-1 well in 2015. While the former Operator of SC 55 notified the Department of Energy of the gas find prior to its withdrawal, the company failed to submit a formal gas discovery report as required under said contract. Palawan55, ACEX subsidiary and current SC 55 Operator, remedied this deficiency by undertaking specialized technical studies that proved the existence of the gas resource, to the satisfaction of the DOE (Flash Slide 2)
Our team also confirmed the drill-ready status of the prospect that another former Operator almost tested in 2012, were it not for last-minute permitting problems. Palawan55 also conducted advanced reprocessing and interpretation of seismic data that were originally acquired by the two former Operators, and this exercise yielded a number of new prospects and leads in the vicinity of the Hawkeye gas accumulation. Drilling scenario planning indicated that the primary prospects are technically drillable.
Encouraged by the promising results of technical studies, Palawan55 acquired the entire 37.5% participating interest of its Australian partner that opted to withdraw from the consortium due to financial constraints (Flash Slide 3). Palawan55 thus doubled its stake in the block to 75% and remains as the Operator.
Moreover, Palawan55 notified the DOE of SC 55’s direct entry into the Appraisal Period with a commitment to drill one deep water well. This exploration phase would allow the consortium to test other prospects in the block that could merit stand-alone or cluster field development. As mentioned by our Chairman earlier, the DOE has confirmed SC 55’s entry into the Appraisal Period effective April 26, 2020 (Flash Slide 4). The consortium will prepare for the DOE’s approval, a definitive work program that shall include the drilling of at least one well no later than April 2022.
Palawan55 is currently conducting follow-on evaluation of two candidate targets for drilling. Upon completion of the comparative assessment, the consortium will choose the prospect to be drilled, then commence preparations for drilling immediately thereafter. Rest assured that we will keep you posted of material developments through our regulatory disclosures.