Australian oil and gas exploration company Nido Petroleum Ltd. is studying whether to go to the second phase of its oil drilling activities in Galoc oil field or Service Contract 14.

In a disclosure to the Australian Stock Exchange, the firm said “the Galoc Joint Venture continues to assess further facility and subsurface development options for Phase 2 of the Galoc oil field development.”

It said the company is optimistic that the exploration area may prove more potential reserves.

“In support of these efforts, it is important for Nido to have a more current and meaningful understanding of the developed reserves, the undeveloped reserves and any other remaining potential in the field,” it said.

Thus, Nido said is now updating its reserves assessment of the Galoc oil field to incorporate performance data through to the end of September 2009.

"We will advise the market once this work is concluded in early 2010,” it added.

Galoc has been back on production since mid-August and the field continues to produce at around 11,000 barrels of oil per day (i.e. over 2,500 bopd net to Nido).

In September 15, 2009, some 335,432 barrels of oil (76,745 barrels net to Nido) was lifted successfully from the field.

The field operator, Galoc Production Co. (GPC) has also advised Nido that future offtake has been sold to another repeat buyer (and is due for offtake this month) and the marketing of another productionis well underway.

“With stable oil prices, continued healthy demand for Galoc crude throughout the region and a steady rate of production, Nido’s financial position remains healthy,” it said.