Arrow updates E. Kalimantan CBM exploration activity
Wednesday, February 17 2010 - 01:30 AM WIB
Sangatta West CBM, East Kalimantan
Arrow Energy International drilled its first coal seam gas well in Indonesia. The well is located near the town of Sangatta, in East Kalimantan, about 200km north of the city of Balikpapan and 60km north of the Bontang LNG plant. Initial indications are promising with net coal thickness of 55 metres with good gas content
The effective ownership of the Production Sharing Contract (PSC) permit area is Arrow 24 percent, Ephindo 24 percent, and Pertamina 52 percent. Arrow and Ephindo are jointly operating the block through Sangatta West CBM mc, a joint venture company which is owned 50/50 by Arrow and Ephindo.
The PSC permit area contains coals of Miocene age, primarily of the Balikpapan Formation. Net coal thickness for the target zone could be up to 80 metres.
The Sangatta 1 CBM PSC is an important part of our gas aggregation strategy for the region. Arrow is currently in negotiations to partner on a number of highly prospective coal seam gas opportunities in nearby areas.
Arrow has been invited to participate in Indonesian Government forums tasked with facilitating coal seam gas commercialisation by the year 2011. Arrow is the only company in Indonesia that has a proven track record in coal seam gas production. The company believes that commercial gas could be produced in Indonesia as early as 2011 if government regulations are streamlined and barriers to market removed.
The current drilling program and continuing governmental talks represent exceptional opportunities for Arrow and the Republic of Indonesia to work together. (end of excerpt)