Cue, partner to farmout interests in Mahakam Hilir PSC

By Romel S. Gurky

ASX-listed Cue Energy Resources Ltd said that the company and SPC Mahakam Hilir Pte Ltd, the operator of the Mahakam Hilir PSC on shore East Kalimantan, have decided to farmout their interests in the block after appraisal/exploration of the Naga Utara-2 well earlier in the year found insufficient hydrocarbon potential.

?The Naga Utara-2 well was plugged and abandoned following wireline logging and the rig was released on 8th January 2014,? the company said in a quarterly report released Tuesday.

The well achieved the primary objective of appraising the intervals seen in Naga Utara-1 that were interpreted to be gas-bearing and intersecting deeper prospective sands which were below the TD of the first well. However, only minor indications of gas were seen in the 8? inch hole at Naga Utara-2 which could not be evaluated with wireline logs. The well was sidetracked and Naga Utara-2 ST intersected similar stratigraphy and a suite of wireline logs was obtained, but following evaluation of the logs it was concluded that testing was not warranted. Naga Utara-2 is interpreted to have intersected the key reservoir intervals in a down-dip position relative to Naga Utara-1, close to a possible gas-water contact, the report said.

?Following evaluation of the well results, the Joint Venture has decided to farmdown its interest in the block and the operator is marketing the property on behalf of both Cue and itself,? the report said.

Cue Energy through its subsidiary Cue Mahakam Hilir Pty Ltd holds a 40 percent interest in the Mahakam Hilir PSC, while SPC Mahakam Hilir Pte Ltd holds a 60 percent interest as the operator.

Editing by Reiner Simanjuntak