(text taken from 2009 Annual Report)

In late 2008, Pitkin Petroleum started implementing some of its farm-in commitments in the West Linapacan Block and by February 2009 had completed the seismic re-processing by Western Geco.  Other geophysical and geological     (G & G) studies were completed, although delayed by a few months as per project timeline.  These are the Seismic Reservoir Characterization Study including Seismic Inversion by Schlumberger  which was completed in July 2009, the Sequence Stratigraphic Study and Petrophysics by Isis Petroleum Consultants in September 2009, and the Conceptual Engineering Study for the West Linapacan “A” field by OPE, Inc. towards the end of 2009.   Philodrill is carried in all of these activities as well as in the drilling of a development well up to first oil. 

Because of the unexpected delays in the completion of the G & G studies, Pitkin sought for an extension of its Phase 1 work commitments which expired in August 2009 as per the farm-in agreement.  The West Linapacan Consortium granted the extension with the issuance of an executed amendment to the farm-in agreement such that the completion of the Phase 1 work shall be on or before June 30, 2010.

Based on the integrated results from the abovementioned technical studies, and using a wide range of evaluation techniques, Pitkin has developed a concept with which new well/s will be drilled, completed and produced.   Since the West Linapacan Field is expected to be highly-fractured, as confirmed from the previously drilled production wells, Pitkin is looking at drilling sub-horizontal section/s that will follow fracture trends that will yield optimum flow rates.  The producing wellbore sections will use “smart completion” technologies enabling the isolation of sections where formation water breaks through.  With regard to the production facilities, Pitkin proposes to put up a turret-mounted storage vessel with on-board processing facility which they presented to the partners for consideration during a January 2010 technical meeting.   The consortium has asked the operator to continue to explore other cost-effective, technologically feasible development concepts for the field.