Jul. 2--Alcorn Gold Resources Corp.(AGRC) has sold its entire stake in the country's first oil development project in over a decade to its consortium partners due to the minimal revenues the project contributes to the company.

In a disclosure to the Philippine Stock Exchange, AGRC said that it has signed an agreement with Galoc's current consortium members for the sale of its 1.53-percent participating interest in the oil field for roughly $1.20 million.

"AGRC has accepted all the terms and conditions in the sale . . . at $800,000 per percentage interest point, effective June 30, 2009," the company said.

Galoc Production Co. (GPC), the field's operator, and its minority partners in the project, Nido Petroleum Ltd., The Philodrill Corp. and Oriental Petroleum & Mineral Corp./Linapacan Oil Gas & Power Corp. will acquire AGRC's shares under a pro-rata sharing scheme.

AGRC said that it decided to unload its stake in the field because it deemed that the revenue it derives from project is too minimal "considering the risks involved."

Based on the company's unaudited first quarter financial statement, more than 90 percent of its revenues amounting to P6.02 million was derived from interest income from financial institutions and other income from trading activities at the bourse.

AGRC is a Philippine-based holding company engaged in exploration, development and production of oil and gas, metallic and non-metallic reserve.

In the upstream oil and gas industry, AGRC holds interests in service contract (SC) 14C--which contains the Galoc, West Linapacan and Bonita fields. It also has interests in SC 6A, which houses the Octon field in offshore Northwest Palawan, as well as in SC 51 in the East Visayan Basin in offshore Cebu and Leyte.

Of the said petroleum blocks, only Galoc has been producing oil since 2008 at a rate of about 15,000 barrels of oil per day but production at the field was recently suspended because of adverse weather conditions.

Galoc was estimated to hold crude reserves of up to 10 million barrels of oil at the time of GPC and its partners committed to undertake the project in 2006. An independent study commissioned by Nido on the field in 2008 found that Galoc may yield at least 40 million barrels of oil.

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