Continental, CBM Asia to jointly bid for CBM blocks

By Alexander Ginting

Junior exploration firm Continental Energy Corporation announced on Tuesday that it has entered into a Joint Study and Bid Group agreement with CBM Asia Development Corp.

CBM Asia, a Canadian-listed coalbed methane (CBM) company focused solely on the Indonesian CBM industry and with interests in four CBM production sharing contracts is pursuing new CBM opportunities in Indonesia.

Under the agreement, Continental and CBM Asia will jointly and exclusively study selected areas in Indonesia with the objective of identifying geologically justified candidate areas to be jointly pursued as targets of opportunity for direct acquisition of CBM PSCs offered by the Indonesian government through public tenders or through direct proposal tenders conducted under joint study arrangements.

Successful CBM PSC acquisitions shall be shared by Continental and CBM Asia under a pre-agreed joint operating agreement (JOA) format in the participating interest proportions 75% CBM Asia and 25% Continental. CBM Asia shall act as operator under the JOA and any CBM PSC and shall pay 100% of the JOA's CBM PSC general and administrative costs.

All CBM PSC acquisition costs and other JOA exploration and drilling costs shall be borne by the parties in proportion to their respective JOA participating interests.

Indonesia has the world's second largest CBM reserves after China, with total potential reserves of 453 trillion cubic feet, twice that of its estimated conventional natural gas resources.

Editing by David Mustakim