CBM Asia : 2nd exploration well in Kutai reaches target

By Romel S. Gurky

CBM Asia Development Corp. said it had been informed by the operator Newton Energy Capital Limited that the second exploration well (CBM-KW-01) at the Kutai West coalbed methane production sharing contract (Kutai West CBM PSC) in East Kalimantan has reached the target depth of 900 meters.

The company said in a press statement on Friday that approximately 32 meters of net coal were encountered. "We are encouraged by the results of the CBM-KW-O1 well so far," said CBM Asia President Director and Chief Executive Officer Alan Charuk.

CBM Asia holds an 18% working interest in the Kutai West CBM PSC, which is located in East Kalimantan, Indonesia, close to the Bontang liquefied natural gas (LNG) plant.

"The net coal thickness of 32 meters is 28% thicker than net coal thickness of 25 meters found at the CBM-KW-02 well which we recently released results on. We look forward to receiving gas content results from core samples over the upcoming weeks,? he said.

The drilling rig is expected to be demobilized from the CBM-KW-01 site once permeability tests have been completed. The rig will be later moved to the third location to drill the CBM-KW-04 exploration well, which is located approximately halfway between CBM-KW-01 and CBM-KW-02.

The Kutai West PSC is located west of VICO's Sanga-Sanga CBM PSC, which has been producing CBM for export from the Bontang LNG facility to North Asian consumers since March 2011. The Indonesian government recently announced that Sanga-Sanga CBM will earn USD7.50/Mcf for gas to be sold to local power producers.

Editing by Benget Besalicto Tnb.