SC72 RECTO BANK (FORMERLY GSEC101)

The Recto Bank concession or SC72 is located in the South China Sea west of Palawan Island. The licence is located to the southwest of the Shell-operated Malampaya Gas Field.

SC72 (formerly GSEC101) was awarded to Sterling Energy Plc (AIM: SEY) in June 2002 and covered an initial two-year term. Exploration in the area began in 1970 and in 1976 gas was discovered following the drilling of a well. In total, three wells have been drilled to date, all located at the south west end of the structure. Two of the wells tested gas at rates of 3.6 mmcf/d and 3.2 mmcf/d.

In 2003, Sterling reprocessed a number of 2D seismic lines and completed a feasibility study on the gas-to-liquid options for the gas field. The seismic work and the gas-to-liquid study fulfilled the initial work commitments on the concession and Sterling was granted a 12-month extension in June 2004.

In April 2005, Forum acquired the concession from Sterling and became its operator.

In July 2005, Forum acquired new 3D seismic data over the licence area, fulfilling its work commitments required under the 12-month extension.

In 2006, results from the 3D seismic programme and its interpretation performed by independent consultants, Count Geophysics Limited, indicated mean volume of 3.4 TCF gas in place (GIP) from sands tested in the 3 wells drilled to-date and the extension of the structure to a possible closure of 290 sq. km giving a significant upside potential in these sands alone of 10 TCF.  Additional untested sands, which are known to contain gas, could double this figure. The block also contains 8 additional leads which require further work that has the potential to add a further 20 TCF in aggregate.

In 2008, Monte Oro Resources & Energy, Inc. acquired a 30% interest in the block upon payment of certain portion of the past costs and expenses of Forum.

On 15 February 2010, the licence was converted to a Service Contract and the Company immediately performed geological and geophysical works to further evaluate the block and to fulfill its commitment to the government.

In mid-January to mid-March 2011, Forum acquired more than 2,200km of 2D and 550 sq km of seismic data over the block. Processing of the 2D and 3D data is expected to be completed in September 2011.