Summary of Participating Interest
(As of December 31, 2011)
| SC | Location | % of Interest |
| SC-41 | Sulu Sea | 1.09 % |
| SC-60 | NE Palawan | 15 % |
| SC-71 | Offshore Mindoro-Cuyo | 15 % |
SC-41 Offshore Sulu Sea Sandakan Basin
Service Contract No. 41 ran the full length of its exploration period extending exploration activity to ten (10) contract years. Operator, Tap Oil, drilled a well in 2008 and undertook extensive seismic processing and re-processing of the 3D seismic data in 2009 to 2010.
The SC-41 group was given until August 10, 2010 to decide to whether or not to extend the SC by another year. Given that the next phase of the service contract would have included a work program commitment to drill an exploratory well by May 2011, it was concluded that a well was not appropriate in light of the tight schedule and a pending Philippines Energy Contracting Round.
The operator was not able to secure an appropriate farmout due in part to the tight time frame of the work program and made the decision to relinquish SC-41prior to incurring the well commitment.
The SC-41 group views the area as still having prospectivity and may pursue exploration in the future with an appropriate work program to address the technical risks. Agreement on the composition of the new joint venture would be discussed in advance of making any application over the area, with the intent that existing partners would participate in new energy bidding round expected in 2011.
SOCResources had 1.090% paying participating interest in this block.
Service Contract No. 60 Northeast Palawan (formerly GSEC-99)
The joint group of SOCResources, Shell Philippines Exploration B.V. and Kuwait Foreign Petroleum Co. ksc. entered the second sub-phase of SC-60 in July 8, 2008. The objective is to continue and further the exploration of the block with a commitment to drill one well during the sub-phase.
The Silangan-1 well was spud-in on July 20, 2010 and was the first deep water drilled in the area. This well was drilled within the second sub-phase of the service contract and SOCResources was carried on this well.
The well was plugged and abandoned without encountering significant hydrocarbons. Operator, SPEX, reviewed the well data to determine the cause of the unexpected results and identified appropriate next steps over the area. Using Cutting edge technologies the Joint Operations launched a CSEM (Controlled Source Electro-Magnetics) survey during the second half of November 2010. The survey was undertaken by Electromagnetic Geoservices ASA (EMGS) using the vessel “BOA Galatea”. EMGS employed their proprietary EM Technology to support the SC-60 Joint Operations in its search for offshore hydrocarbons. To give enough time to process the data obtained from the survey, a request to the DOE to extend the decision period to enter the third sub-phase by a year was made. The DOE in its letter dated January 26, 2011 approved the request to defer commitment to enter the third sub-phased to February 10, 2012.
After a thorough review of the results of all studies done on the area, a decision based on the unsubstantial findings of the Silangan well and the CSEM survey, the JV through the operator decided not to proceed with the third sub-phase.
SOCResources had 15% interest in the block and was a paying partner after the first well.
Service Contract No. 71 (formerly AREA 4 – Offshore Mindoro-Cuyo Area)
SOCResources participated in the Department of Energy’s Philippine Energy Contracting Round No. 3 (PECR-3). On April 1, 2009, the DOE awarded SC-71 to SOCResources and UK company Pitkin Petroleum Ltd. (as operator), a block that covers the offshore Mindoro-Cuyo with an area of 1.164 million hectares.
The joint group embarked on a comprehensive seismic reprocessing of over 3000 line kms of 2D seismic data over the area for the first phase of work. It also included a reprocessing and re-interpretation of available gravity data. By year-end work was still ongoing. The first phase has been extended to April 1, 2011.
The Service Contract has term of seven (7) years compartmentalized into five (5) phases. The group has the option to proceed or withdraw at the end of each phase. The second sub-phase will entail acquisition, processing and interpretation of a minimum 750 line kms of 2D seismic. SOCResources has 15% participating interest and is carried on the first phase of the SC but will be a paying partner on the second and succeeding phases.
Prospects for Other Energy and Mineral Resources
The Company continues to focus on conventional energy resources as it explores entry into opportunities in other oil exploration areas as well as potential conventional and non-conventional energy resources. The global situation in recent years presents opportunities for the Company to seek entry into mineral exploration and exploitation sector. It recognizes that the demand added by China and India into the current global mineral resource market and into the foreseeable future will have a significant impact in the metals and non-metals market.