CBM Asia submits 2nd application CBM concession

Vancouver-based CBM Asia Development Corp has submitted an application for a second coalbed methane (CBM) Production Sharing Contract (PSC) in the gas-rich Kutai Basin of East Kalimantan.

?This application covers an area of 56,300 hectares that is adjacent to, and contiguous with, the area of our existing Kutai West PSC. Once completed, the Company will retain a 40% interest in this new PSC,? the company said in a statement on Thursday.

The block is estimated to contain 80 TCF of CBM, it said.

The company completed the PSC application and submitted it for technical review by BPMIGAS on June 15, 2009. A joint evaluation will follow in mid-July, to be conducted along with BPMIGAS. The joint evulation is expected to take about four months.

The company expects that, based on the results of the joint evaluation, a PSC will be awarded. The second PSC, if successfully awarded, will bring the company's CBM concession in the region to 132,300 hectares.

Meanwhile, the company said the bidding process for services needed for its Kutai West PSC is still in progress. The services are related to the environment, drilling, logging, cementing, coring, laboratory analysis and construction.

The company expects to have equipment moved to its site this summer in preparation for initial drilling program. (denny)