AED updates Indonesian ops
Friday, July 29 2011 - 03:40 AM WIB
Rombebai, Papua (AED interest: 100%)
A careful review of all data provides a more positive view of this relatively high risk but very high reward contract area. A past gas discovery in the Niengo-1 well flowed gas at rates which would clearly be commercial. The Neingo anticline was defined by gravity data and a small amount of seismic data in 1958. At the time gas was not marketable and no follow-up work was undertaken. On the better-defined Gesa anticline, two wells were drilled in 1956 and 1957; both of which had to be abandoned due to high pressures accompanied by gas flow before reaching their objectives.
Given the renewed interest in long-term LNG projects caused by the current re-evaluation of nuclear power, particularly in Japan, AED believe there will be strong interest among major companies for participation in Rombebai. Importantly, the exploration period on the acreage has recently been extended to July 2013, further increasing the appeal.
The potential gas volumes in the Rombebai contract area may be of world class LNG size. Recent remapping of the Gesa and Niengo anticlines shows potential volumes from 2 to more than 30 Tcf (unrisked) in the combined prospects. A new well on the Gesa anticline, (Kare-1) has been proposed and approved by the Indonesian authorities; detailed planning and permitting is underway. The recruitment of Joint Venture participants by way of a farm-out has commenced.
The estimated prospective resource potential for the Gesa prospect is between 2 and 30 Tcf (unrisked). Four horizon levels have been mapped and nominal net sand thicknesses have been applied to each level, along with other parameters for the low/mid/high case volume estimates. The low-case scenario only considers volumes associated with the West Gesa high, and the mid and high case scenarios include the entire Gesa structure.
Forward Work Program
AED is continuing with interpretation and mapping and will carry out reprocessing on available 2D seismic data. This reprocessing will provide critical information for casing design of the Kare-1 exploration/appraisal well, as well as being used to carry out an AVO analysis. Drilling preparation activities for the Kare-1 well are continuing.
South Madura Onshore (AED interest: 60%)
AED?s current exploration in South Madura is focused on assessing the deeper Kujung platform play, as well as continuing to review the shallow clastic potential. This work will build a lead and prospect inventory orior to seismic acquisition and exploration drilling. A reassessment of the Kurnia structure has been undertaken and several further leads have been identified in other areas of the block. The Kurnia prospect was drilled by Kurnia-1 in 2007 and produced gas under test conditions from the Kujung formation.
AED?s attention has been drawn to the deep Kujung platform play by one of AED?s highly experienced geophysical interpreters. This play is successful in the Cepu block to the west and also in the Madura Straits to the south. The Company believe these trends extend into the South Madura contract area and are further supported by information from the Kurnia-1 gas discovery drilled before AED entered the PSC. AED believe there will be at least three to six leads for deep Kujung oil and gas targets, which need to be defined by 3D seismic, which will be acquired in the block in 2012. Therefore, the South Madura PSC is of increasing interest to those companies able to provide the capital required for its evaluation. Target volumes are expected to be in the fifty million barrel range and potentially upward to several Hundred million barrels.
Subsequent to quarter end AED assumed Operator of this PSC (subject to approval by Indonesian government agencies), further evidencing our enthusiasm in this acreage and increasing our ability to manage the future exploration direction through seismic acquisition and drilling programs.
Forward Work Program
Prospects within the Kujung formation are currently being delineated on the available 2D seismic and appear to display similar depositional geometries to the nearby field analogues. AED intends to continue mapping prior to planning and acquiring a 3D seismic survey which will be used for future exploration drilling. (end of edited excerpt)