Cooper farms out E. Java exploration block

South Madura Exploration Company (SMEC), a wholly owned subsidiary of Australian upstream firm Cooper Energy Limited, said Tuesday that it had farmed out 15 percent interest in the South Madura PSC onshore East Java to Nations Petroleum.

Cooper said that it would receive a partial reimbursement of back on the PSC, funding of Kurnia-1 exploration well and funding of the 2006 2D seismic work program. These benefits represent a financial exposure reduction of US$6.15 million.

The farm out is subject to the approval of the Indonesian government.

The Kurnia-1 prospect, which is located in the southern part of the block, is evaluated to have reserves of 256BCF of recoverable gas and 199 million barrels of recoverable oil, at confidence level of 50 percent. Drilling is expected to take place later this year.

Following the farm out, the final participating interests in the South Madura PSC are SMEC 30 percent (operator), Nations Petroleum 60 percent and the remaining by local firm PT Eksindo, Cooper said.

Nations Petroleum is a substantial private oil and gas company that holds oil and gas interests in California, Azerbaizan and Indonesia. Nations Petroleum recently divested its ownership of a project in Kazakhstan for $1.9 billion. (denny)