CBM Asia provides operations update to 2010 Work Program
Thursday, April 29 2010 - 11:04 PM WIB
Sekayu PSC, South Sumatra
With respect to the 58,349 hectare Sekayu Production Sharing Contract block, located in the South Sumatra Basin, the previously announced spud date for the second coalbed methane test well was delayed pending finalization of a joint operating agreement (JOA) between Jakarta-based operator PT Medco Energi Internasional Tbk (Medco) and South Sumatra Energy Inc. (SSE). This crucial JOA has been outstanding since the award of the Sekayu PSC. On behalf of the shareholders of SSE, our legal and operations staff has worked with Medco to finalize this agreement.
Upon the signing of the JOA, Medco has informed the Company that it will proceed with the CBM-SE-01 well south of the first well location where, according to our geological information, the coals are projected to be deeper and thicker. CBM Asia's technical team has worked with the coalbed methane group at Medco to secure proper services and maximize the opportunity to gather critical gas content measurements from this second well.
Kutai Basin, East Kalimantan
Once the South Sumatra JOA is signed, the legal team will turn its attention to the outstanding issues on the Kutai-West PSC and Kutai-Ephindo blocks. On behalf of the shareholders of Kutai West CBM Inc. we have been working with Newton Energy Capital Limited (Newton Energy) to finalize the JOA for the Kutai-West PSC.
Our technical staff has been working with Newton Energy to source service companies, prepare bid documents and refine well locations on this block.
Once the JOA is finalized and signed the Company expects to drill the first of a series of wells in the Kutai-West PSC.
With respect to the second Kutai block, for which a PSC application was submitted to BPMigas in June 2009, the Company anticipates an operator to be appointed during the second half of 2010, to be followed by the signing of a joint operating agreement among consortium members and the continuation of the application with a Joint Evaluation Study.
CBM Asia continues to hold sufficient cash balances for fiscal year 2010, to meet its financial obligations under the proposed work programs on the Sekayu PSC and Kutai blocks.
About CBM Asia Development Corp.
CBM Asia Development Corp. is a Canadian-based unconventional gas company with CBM exploration and development opportunities in Indonesia.
The Company has entered into a binding letter of intent to acquire a participating interest in a production sharing contract ("PSC") for CBM on a 58,349 hectare block located in the South Sumatra Basin where initial exploration drilling of a production test well commenced in the second half of 2009. The Company has committed to fund an initial US$3.25 million in exploration expenditures on the Sekayu PSC to prove reserves and submit a Plan of Development to the Government of Indonesia.
Sekayu Block Interests of the Company, Ephindo and Batavia Energy are held in South Sumatra Energy, Inc.
The Company also has an 18% net working interest in a PSC for CBM on a 76,000 hectare block located in the Kutai Basin of East Kalimantan. As geotechnical lead, the Company is responsible for directing a US$5.6 million exploration and appraisal program to November 2011, to determine commercial feasibility of CBM production for the Kutai-West PSC and submit a Plan of Development.
The Company has 40% net working interests in a second 56,500 hectare block also in the prolific Kutai Basin. (end of edited release)