Cue says more drillings needed to determine size of E. Java oil discovery

Australian oil firm Cue Energy Resources said thus far participants of Sampang PSC offshore East java are not able to determine the potential of Jeruk discovery despite having conducted several side several sidetrack drillings to appraise the discovery.

?The Jeruk drilling results to date indicate more variation in the rock quality and possibly a more complex reservoir system than earlier thought. There remains significant uncertainty as to the size of the oil pool,? the company said in a quarterly report released Thursday.

Cue also said that examination of 3D seismic data suggested that the Jeruk structure is likely to be more complex than previously mapped.

Cue said the Sampang PSC operator Santos is integrating the drilling results and the 3D seismic interpretation into the evaluation of Jeruk. It is expected that additional wells will be required to determine the potential of the discovery. The first of these wells could begin drilling around the end of 2005.

Jeruk-2 well flowed 7,488 barrels of oil and 2.21 million cubic feet of gas per day on test last year. Preliminary estimates by Santos put the recoverable reserves number at 170 MMBO.

Australian top oil producer Santos holds 45 percent working interest in Sampang while Singapore Petroleum Company and Cue hold 40 percent and 15 percent, respectively. (alex)