CBM Asia to accelerate commercialization of RI assets
Tuesday, March 18 2014 - 01:58 AM WIB
Canadian firm CBM Asia Development Corp said that its new management team led by recently appointed CEO Charles Bloomquist, an industry expert with more than 40 years of experience, aims to accelerate the commercialization of its assets in Indonesia.
In an update statement to investors on Monday, CBM Asia said it has substantial CBM resources -- nearly 1 Tcf of audited net recoverable prospective resources in two well-positioned blocks in Indonesia. ?The company strongly believes that even small-scale levels of commercial production will greatly enhance the already substantial value of these assets,? it said.
CBM Asia holds an 18 prcent working interest in the Kutai West Production Sharing Contract (PSC), with 705 Bcf of net recoverable prospective resources based on an independent audit conducted by Netherland, Sewell & Associates, Inc. Kutai West is regarded as one of the best and commercially most advanced of the approximately 50 awarded CBM blocks in Indonesia, the company said.
Importantly, Kutai West borders the Sanga-Sanga PSC, where VICO (BP and partners) is commercially producing and selling CBM for power generation and gas export from the nearby Bontang LNG facility. As VICO notes: "This is the first time in Indonesia that any CBM facilities have produced and sold gas and represents a major milestone in the exploration of CBM potential."
Kutai West will exploit the same coal seams as Sanga-Sanga. To date, the company and its partners have drilled four CBM test wells on our block, recording thick coal seams with high gas content and saturation, and good 5-mD permeability. The KWCBM-01 well is currently being dewatered, venting a small but increasing volume of produced gas from the flare, which is a key first step towards larger scale production.
?Management's main focus this year is to accelerate gas production at Kutai West with a 5-well pilot, followed by a larger commercial scale 30-well development,? CBM Asia said.
?We have reached initial agreements to sell the produced gas to Navigat Energy for on-site power generation and later to VICO to feed the massive and gas-short Bontang LNG export network. Anticipated gas prices are high, in the range of $8-12/Mcf. Bontang exports LNG to Japan and other Asian rim importers, who are critically short of natural gas due to significant rollbacks of their nuclear power generation,? it added.
CBM Asia also holds a 26 percent working interest in the Sekayu PSC in South Sumatra, providing us with an additional 276 Bcf of net recoverable prospective resources (NI 51-101 compliant audit conducted by NSAI). Four CBM test wells have verified thick coals with favorable coal properties.
?We are working with operating partner Medco Energi to accelerate the commercialization at Sekayu, initially through on-site power generation, or by co-development with a nearby recently discovered conventional gas field,? the company said.
Editing by Reiner Simanjuntak