CityView seeking to revise oil work program with Medco

Australia's oil and gas firm CityView Corporation Limited is in talks with Indonesia's PT Medco Energi International to revise the terms of a June 2000 agreement to develop the Simenggaris and Madura blocks.

Under the agreement, Medco would do the work to develop the two oil blocks (2 wells in the Madura block, and 1 in the Simenggaris block), and cover the expenses in return for a 75 percent stake in the blocks, with the remaining 25 percent to be held by CityView, under a free carry mechanism.

But CityView told shareholders during an annual meeting on May 30 that the board is persuading Medco to increase the free carry to 5 wells (four in Madura block and 1 in Simenggaris block).

"... we engaged Medco in discussions over the issue and have persuaded them to increase the free carry to a total of 5 wells (4 wells in the Madura block and 1 well in the Simenggaris block) and the costs of the seismic survey to be carried out over the Simenggaris block this year," the company's chairman said Friday in a speech to shareholders.

"This means that CityView is free carried for Sebaya, Karasan, Tambuku and Telaga which is currently being drilled in Madura. Our free carry in Simenggaris would cease upon the completion of the seismic survey sometime later this year."

CityView has a 25 percent gross interest in both the Madura block (674,100 acres), located in Madura Island, off the coast of Surabaya, and Simenggaris (675,582 acres) block, located in East Kalimantan.(amoros)