CBM Asia announces South Sumatra CBM JOA

Canadian CBM developer CBM Asia Development Corp. announced on Tuesday the signing of a Joint Operating Agreement (JOA) between Jakarta-based operator PT Medco CBM Sekayu,, a wholly owned subsidiary of PT Medco Energi CBM Indonesia, and South Sumatra Energy Inc. (SSE), which is owned, directly and indirectly, by a consortium of companies including CBM Asia, for the Sekayu CBM PSC block, located in the South Sumatra Basin.

The Sekayu JOA is retroactive to May 27, 2008, the date the PSC was granted by the Government of Indonesia, and establishes the respective rights and obligations of the operating and non-operating parties under the Sekayu PSC, the Company said.

?MedcoEnergi has an established project management team which has considerable experience and can now be mobilized. Further, MedcoEnergi has completed almost all procurement of the services and equipment required to spud the next three exploration wells in the Sekayu block sequentially, which, together with other operational efficiencies, should result in cost savings for the parties,? it added.

MedcoEnergi and SSE each hold a 50 percent participating interest in the Sekayu PSC.

CBM Asia is currently holding 13 percent stake at SSE with option to increase shares to 26 percent by completing an additional US$1,743,500 in exploration expenditures under the Sekayu PSC on or before December 31, 2012. (alex)