Canadian firm acquires Sumatra exploration blocks

Calgary-based junior oil, gas firm Pan Orient Energy Corp. announced on Monday the purchase of 90% interest in the 3,989 square kilometer Batu Gajah PSC, onshore South Sumatra for US$6 million cash.

Malaysian firm Ranhill Berhad retains 10% carried working interest through to first commercial oil or gas production.

Pan Orient has also purchased a 90% operated interest in the Pamai Taluk Joint Study Area (JSA) located onshore South/Central Sumatra from Ranhill for $1 million. Under the terms of the JSA between Ranhill and the Indonesian licensing authority MIGAS, Pan Orient will now have the right to match any offer made on the proposed Pamai Taluk PSC during the upcoming Indonesian licensing round that is anticipated to be announced in June/July 2008, the company said.

The Batu Gajah PSC was awarded to Ranhill on January 16, 2007. Under the terms of the PSC, Ranhill is committed to 500 kilometers of 2D seismic, 400 square kilometers of 3D seismic and the drilling of three wells to be completed over a three year period. To date, none of the proposed work program has been initiated on the PSC.

Six prospects and leads have been identified on the PSC utilizing a course grid of 2D seismic data. Seismic mapping suggests a number of the PetroChina fields extend on to the PSC with wells drilled, in at least one case, right on the concession boundary, the company said.

Pan Orient may, subject to government approval and further work, conduct 2D/3D seismic acquisition in 2008 followed by the drilling of three wells in 2009, it added.

Pamai Taluk JSA is located east of the Barisan mountain front straddling both the south and central Sumatra basins. The acreage was formerly explored in the 1970's-1980's by a consortium of Exxon and Mobil. The existing seismic data coverage and well control is sparse and the area very under explored, it said. (alex)