CBM Asia announces Kutai West operational results, sign MoU with Navigat Energy

By Romel S. Gurky

Vancouver, Canada-based firm CBM Asia Development Corp. provides an update on recent testing activities at the Kutai West PSC, the signing of a gas-to-power Memorandum of Understanding with PT Navigat Energy and the C$ 3.8 million non-brokered private placement.

In a statement received Wednesday, the company, in collaboration with operator Newton Energy reported the following operational results from the KW-CBM-1 well in the Kutai West PSC, East Kalimantan. Service contractor Halliburton has conducted DFIT (mini-frac) reservoir tests on four coal seam intervals to measure permeability and pore pressure. Halliburton then successfully pumped hydraulic stimulations as designed into the four coal seam intervals. The rig has been released and a progressive cavity pump has been installed in the well for long-term production testing.

Preliminary well test analyses conducted by Halliburton, as well as the corresponding gas content data measured previously by GeoGas, are reported as follows;

Coal Seam Reservoir Test Results from KW-001-CBM Well
Coal Seam Interval	Interval Depth				Absolute Permeability	Pore Pressure	Gas Content dry, ash-free
	Top		Bottom
	(m)	(feet)	(m)	(feet)	(mD)	(psi)	(m3/t)	(ft3/ton)
1.	314.0	1030.2	319.0	1046.6	5.39	450	7.22	231
2.	366.5	1202.4	368.0	1207.3	5.83	526	6.34	203
3.	467.4	1533.5	470.0	1542.0	4.78	736	9.12	292
4.	690.7	2266.1	693.7	2275.9	1.17	952	11.21	359

CBM Asia Chairman Scott H. Stevens noted ?These further tests at the Kutai West PSC, located just 20 km from the Bontang LNG export facility, demonstrate good coal seam permeability and reservoir pressure. Core testing conducted in 2012 demonstrated excellent gas content at the block. While permeability declined with depth, as expected, we plan to concentrate on the shallower coals above 2,000 feet which have good permeability in the 5-mD range.?

CBM Asia also said that it has signed a Memorandum of Understanding (MOU) with PT Navigat Energy to supply up to 5.0 MMscf/d of coalbed methane from its planned production pilot(s) to gas engine power generation project(s) in the Barito Basin, South Kalimantan, Indonesia. The two parties will proceed to negotiate with PT PLN (Persero), Indonesia?s state power supplier, on the sale of power and gas. CBM Asia?s role will be limited to gas producer and supplier.

PT Navigat Energy is an integrated distributed power project developer in South East Asia focused on the value chain of equipment sales, services, construction and asset ownership of small scale power projects (1-100MW). The group is involved in the supply and development of a total 803 MW in Thailand, Indonesia and Myanmar and is supported by the largest power equipment supplier, General Electric and Standard Chartered Bank, one of the largest banks in Asia.

?With the signing of gas-to-power MOU and the gas-to-LNG MOU (signed in September), we have established commercial channels for early monetization of up to 55 MMscf/d from pilot production and beyond under Plan of Developments,? states Alan Charuk CBM Asia?s President and CEO. ?The quality of our potential gas offtakers, joint venture partners and their financial supporters will play a major role in our ability to secure project financing for these exciting development programs.?

Elsewhere, the company said it has received subscriptions and funds totaling approximately C$250,000 for the C$3.8 million private placement announced on November 25, 2013 and is in the process of execution. The C$517,734 management tranche announced on August 26, 2013 is fully subscribed with all funds received. The management tranche has been transferred to the new Private Placement and will be executed following public disclosure of the conclusion on the ExxonMobil Umbrella Agreement amendment and TSX-V acceptance.

Editing by Reiner Simanjuntak