Andalas presents to Pertamina proposed work program at Tuba Obi East TAC
Thursday, July 7 2016 - 01:46 AM WIB
Andalas Energy and Power Plc, the London Stock Exchange?s AIM-listed Indonesian focused oil and gas exploration company (ADL), said on Wednesday it has delivered its presentation on the proposed work program to test the Air Benekat Formation (ABF) at Tuba Obi East (TOE) Technical Assistance Contract (TAC) in Jambi, to the Indonesian state-owned oil and gas firm PT Pertamina.
ADL said in a statement that in parallel it has advanced all other necessary work streams, including identifying two candidate locations, selecting the team, surveying the location, establishing necessary health, safety and environmental policies, which are all key in preparing for the execution of the work program on a timely basis following Pertamina approval.
ADL signed a deal in March to acquire a 30 percent direct working interest in the TOE concession through the execution of a single well work program. The work program includes the completion of a geological, geophysical and reservoir (GG&R) study along with the drilling and flow testing of a single well to assess the deliverability, recoverable volumes, and gas quality in the Air Benakat formation. Block operator PT Akar Golindo will help ADL in operating the well work program.
The TOE concession is ADL?s first asset in Indonesia as the company aims to capitalize on Indonesia?s expanding gas to power market opportunities.
Elsewhere, ADL reiterated in the Wednesday statement that the company is looking to roll out its gas to power offering which it believes can make a significant contribution to Indonesia?s power shortfall at the local level.
ADL CEO, David Whitby, said: ?Andalas is in the right place at the right time: Indonesia has multiple stranded gas discoveries; the country has a well-documented shortage of power; the government has set a target to add 35,000 MW of new capacity by 2019; and importantly the recent ground-breaking ceremony evidences that Indonesia recognizes at the national and local level the contribution that small gas to power projects can make towards hitting this target.?
Indonesia?s President Joko Widodo has endorsed the construction of six mobile power plants (MPPs) at a recent ground-breaking ceremony as the government of Indonesia looks to increase electricity capacity across the archipelago by 35,000 MW by 2019;
?TOE is our first property, which will be advanced by the execution of our farm-in work program, once necessary consents are received, and our internal and external team is standing by having fully cleared the way to execute,? Whitby said.
?However our proposition does not stop there, we have always said that TOE is our first asset and our ambition is to repeat the Gas-to-Power proposition in other assets across Sumatra, therefore we continue to invest in our deep pipeline of opportunities and look to expand our opportunities as our proposition to solve the Indonesian Power crisis at the local level continues to gain traction with key and influential stakeholders in Indonesia. We believe we are entering an exciting period in the development of Andalas and, as the decision by senior team members to be paid in shares priced at a premium to the market shows, we are not alone.?
Tuba Obi East is located in the South Sumatran basin approximately 30km north-west of Jambi city. The wells previously drilling in the concession have tested gas in the key South Sumatra hydrocarbon bearing formations, namely, the Air Benakat Formation (ABF) and the Talang Akar Formation (TAF). A total of six wells (three wells within the concession and a further three just outside) have been drilled through these zones, with a number having been logged across the ABF and TAF. Several have also flowed gas to surface.
Editing by Reiner Simanjuntak