Australian firm to farm-in S. Sumatra CBM projects

Australian coal seam gas (CSG) firm Arrow Energy said Monday that it has reached an agreement with PT Sugico Graha (Sugico) to farm-in twelve of Sugico?s Coal Bed Methane (CBM) concessions in South Sumatra.

Arrow said that it is an option to farm-in up to a 65 percent interest in each.

Sugico?s concessions consist of twelve coal mining authorization (KPs) in the South Sumatra Basin covering approximately 140,000 hectares. Sugico?s KPs are close to existing gas pipeline infrastructure and growing energy markets, Arrow said in statement.

According to Arrow, the government of Indonesia is currently preparing regulations to oversee the exploration and development of CBM with the regulations expected to be released in the first quarter of 2007. These regulations are expected to give first right of refusal for CBM tenements to the existing and overlapping tenement holders for Coal and Petroleum.

South Sumatra is believed to have potential of 175-180 TCF of CBM gas. (denny)