AED updates exploration progress at Papua and S. Madura blocks
Tuesday, July 27 2010 - 02:47 AM WIB
Rombebai, Papua
Onshore & offshore (AED interest: 100%)
AED believes that Rombebai is a uniquely exciting prospect which could hold a wotid-scale multi-trillion cubic feet (TOF) prospective resource. The Company is targeting a prospective resource in excess of seven TCF in-place gas with potential upside of over double this estimate.
The prospect has an excellent path to market with the potential to become a major liquefied natural gas development. New seismic data and interpretation work has identified the significantly increased prospectivity of the Gesa structure which is located onshore and dose to the coast.
The first well on the Gesa prospect, Kare-1, is intended to be drilled in late 2010 / early 2011.
Following recent approaches from major oil and gas companies, AED has commenced a formal search for a partner to participate in the Gesa-focused exploration drilling program. AED has appointed Macquarie Capital Advisers to assist in finding an appropriate farm-in partner for this project.
AED has already moved through two of the steps that will be undertaken to find an appropriate partner with Expressions of Interest? received from interested parties for the Information Memorandum and the Data Room now open to selected parties with bids due at the end of August. The farm-in process is expected to be completed in September 2010. AED intends to retain a significant interest in the Rombebai project in order to participate in the success that it believes will result from the upcoming exploration drilling program.
AED believes this will be an attractive investment to joint venture partners and as a project going forward. Key highlights of Rombebai are:
? New seismic data and interpretation work has identified the significantly increased potential of the Gesa structure
? The first new well (Kare-1) is intended to be drilled in late 2010/early 2011
? World scale multi TCF prospective resource (targeting in excess of 7TCF P50 in place gas) with upside potential of over double this estimate
? In addition to the gas potential, there is significant prospectively for a major oil find
? 5 wells have been drilled in the Rombebai Contract Area with 4 wells encountering gas
? Prospective resource size has potential to underpin a LNG development ? BP?s Tangguh LNG is the nearest major gas development with full LNG offtake and marketing available
? The Gesa structure is located onshore and near the coast and in close proximity to Asian LNG offtake markets. Indonesia is among the top 3 exporters of LNG globally.
During this quarter, work has progressed on the following key items with the intention to drill Kare-1 late this year/early 2011:
? Identification of drilling locations complete and currently reviewing drilling engineering and well designs to drill Kare-1 to a depth of approximately 2,500m
? Scouting party visited Rombebai site to survey the access options and construction required to formalise the mobilisation plans
? Forestry permithng documents and the Work Program and Budgets have been submitted to regulatory authorities
? Commenced socialisation and community projects in Papua
? Planning commenced for a second well or the potential for deepening of the first well
South Madura
Onshore (AED interest: 60%)
Civil works have been completed, rig mobilisation is in progress and the spudding of the Gigir East-1 is expected shortly.
Interpretation of the 2D seismic (243kms) in the South Madura Contract Area has identified a number of potential targets. The Joint Venture Partners decided to drill a shallow structure, which if a discovery is made, could be quickly developed for the local domestic market. The potential for cash flow in the near term would support the proposed drilling program.
Future exploration activity is likely to concentrate on deeper play types including that identified by the Kurnia-1 well, drilled by the Joint Venture Partners in 2007-2008. The Kurnia-1 well is located in the south of the Contract Area and identified a four way dip closure in two main structures. (end of excerpt)