Daily Drilling Bulletin

February 16, 1998 PSE CIRCULAR FOR BROKERS NO. 145-98 DAILY DRILLING BULLETIN HIPPO-I WELL (Sandakan Basin, Sulu Sea) Arco Philippines, Inc., operator of Geophysical Survey and Exploration Contract (GSEC) No. 74, sounded the Hippo-I well on Saturday, 14 February 1998. The operator has set the 30-inch casing at a depth of 1,433 feet and is now preparing to drill a pilot hole to test for shallow gas hazards in the area prior to drilling the 26-inch hole. Presently, the deviated exploration well is at a depth of 1,469 feet. The well is located in the Sandakan Basin in the Sulu Sea at a water depth of 1,121 feet (342 meters). Hippo-I is a deviated well and is programmed to be drilled to a total measured depth (MD) of 11,755 feet using the semi-submersible rig Atwood Falcon. The primary objectives of this well are the Upper Miocene "G" Sandstone and the Upper Miocene Deep Sandstone with prognosed depths of 6,076-6,150 feet (MD) and 11,357-11,503 feet MD, respectively. The secondary objective is the Lower Miocene "H" Sandstone with a prognosed depth of 3,438-3,518 feet. These reservoirs are interpreted to contain recoverable reserves of 51 million barrels of oil and 1.43 million cubic feet of gas. Hippo-I is programmed to be drilled in 56 days (dry hole basis) at a total cost of US$19.0 million and an approximate additional budget of U.S.$3.7 million for testing. The GSEC-74 consortium is composed of ARCO Philippines Inc. (operator) ( Illegible portion in PSE file ) (MBI), MMC Exploration and Production (Philippines) Pte. Ltd., The Philodoll Corporation, and Basic Petroleum and Minerals, Inc. (SGD.) GRISELDA J.G. BAUSA Director Energy Resource Development Bureau