Dart Energy signs S. Sumatra CBM block
Monday, December 6 2010 - 02:48 AM WIB
Dart partners with PT Medco Energi Internasional with equal stake and Dart as operator, the company said in statement.
The PSC is valid for a 30 year term, with six years of initial exploration and appraisal. During the first and second year of appraisal (2011 and 2012), Dart will undertake various studies and drill two core wells in each year. During the third year of appraisal (2013), it will complete up to 3 pilot wells "though this could be accelerated in the event of early encouraging results," it said.
Dart?s share of costs for the initial 3 year program (including PSC fees and signature bonus) is budgeted at approximately US$8 million.
The Muralim block is located in South Sumatra province. The PSC relates to an area of 983 km2, and covers part of the area of the Medco South Sumatra conventional gas PSC. The area is located within the South Sumatra Basin, which is a major coal and oil producing region with generally net coal thickness in the range of 20 ? 35m. Individual seam thickness can be greater than 20m. Coal rank is sub-bituminous with vitrinite reflectance ranging from 0.30 to 0.35 which bodes well for CBM potential.
The Muralim block is not only close to the South Sumatra pipeline which transports gas to Java, but also to Dart Energy?s other operated CBM block in South Sumatra, Tanjung Enim, where drilling will commence in the near term.
Current conventional gas fields supplying both the local South Sumatra market as well as the export pipeline are in decline, and it is anticipated that CBM may be an available source of supply to replace or supplement declining conventional reserves. The gas shortage in West Java is estimated will be about 300 MMSCFD in 2016. Current pricing of gas supplied from Sumatra to Java is in the region of US$5.00/gj, and is widely considered to be likely to escalate in the future.
Netherland Sewell & Associates, Inc has completed an initial resource estimation of the Muralim block, as at 30 April 2010, and has estimated the following: Best estimate Gas-in-Place resource (gross): 2.7 Tcf; Best estimate prospective resource (gross): 1.5 Tcf
Commenting on the signing of the PSC, Simon Potter, Dart CEO, said: ?We see today?s PSC award as another important step forward in the growth of our Indonesian business and look forward to working with Medco on realising the potential of the contract area. The Muralim block is not only large but has all the indications of a considerable CBM resource, adjacent to existing infrastructure and a market of significant demand and growth potential. Expanding our interests in South Sumatra is strategically relevant, complements our other interests in the region very well and will give us further options for accelerating gas into the substantial markets of Indonesia.? (denny)
