CBM Asia expands Indonesian CBM portfolio

Vancouver-based firm CBM Asia Development Corp. announced on Tuesday it has acquired majority interest in two coalbed methane production sharing contracts (PSC) in Sumatra and Kalimantan.

In addition, the company has applied to the Indonesian government for extensions to both new blocks, which are anticipated to add a further gross area of 2,564 km2, and paid signature bonuses of USD$1.0 million per PSC.

Both agreements require the company to, among other things, fund 100% of the costs of the first 3 years' firm exploration program commitment under the applicable PSC up to a maximum of US$6.5 million per PSC and reimburse the vendors for certain direct and other costs, the company said.

Central Sumatra PSC: The first block acquired is the 519-km2 Hulu PSC in Central Sumatra . The Company holds a 70% participating interest and is the operator. PT Samantak Mineral Prima holds a 30% participating interest. The block is adjacent to the Trans Sumatra gas pipeline and close to the Chevron-operated Duri oil field steam flood operation, a major gas consumer which offers premium gas pricing. The extension would increase the gross area to approximately 1,983 km2.

East Kalimantan PSC: The Company has also acquired a 70% participating interest and operatorship in the 830-km2 Bentian Besar PSC in East Kalimantan . PT Ridlatama Mining Utama holds a 30% participating interest. The block is located west of the Company's Kutai West PSC holdings and the BP-ENI Sanga-Sanga PSC, which recently began selling CBM to the Bontang LNG facility for export. The extension would increase the gross area to approximately 1,930 km2.

CBM Asia is a Canadian-based unconventional gas company with significant CBM exploration and development opportunities in Indonesia . The company holds various participating interests in four CBM PSCs in Indonesia including a 70% participating interest in the GMB Indragiri Hulu block covering 519 km2 in Central Sumatra, a 70% participating interest in the Bentian Besar block covering 830 km2 in the Kutai Basin of East Kalimantan and a 18% participating interest in the Kutai West block covering 869 km2 west of the Bentian Besar block in East Kalimantan. The Company has also entered into a binding letter of intent to acquire a 12% participating interest in a PSC for CBM on the 580 km2 Sekayu block located in the South Sumatra Basin where 3 exploration wells have been drilled by Medco Energi, following initial exploration drilling of a production test well in the second half of 2009. (alex)