Continental Energy in drilling pact with Pertamina's Elnusa

Dallas-based junior E&P firm Continental Energy Corporation announced Tuesday it had signed a Strategic Alliance agreement with service company PT Elnusa, a subsidiary of state oil and gas frim PT. Pertamina to cooperate in oil and gas exploration, development and production projects in Indonesia.

The first project under the pact will be the development of Continental's Bangkudulis oil field in East Kalimantan.

Details are now being worked out by Continental and Elnusa on an arrangement by which Elnusa will 1) drill two new development wells, 2) re-complete an old, shut-in oil and gas production well, 3) install an early production system and 4) shoot a 3D seismic survey to delineate future development wells and thereby earn either an equity interest in the Bangkudulis Field, an entitlement to payment for the services provided, plus an uplift bonus, from oil production once it is established or some other compensation arrangement to be agreed. By accomplishing this work program, Elnusa will also earn a project management contract to provide integrated services for the development, operations and maintenance of the Bangkudulis Field over its entire productive life.

Continental said drilling will commence January next year.

Earlier Continental said it was planning first stage development in Bangkudulis with planned production of around 1,500 barrels per day. (alex)