GFI Oil expands N. Sumatra E&P portfolio

Calgary-based oil firm GFI Oil & Gas Corporation announced on Monday that one of its subsidiaries had executed a farm-in agreement with Transworld Seruway Exploration Limited (TSEL) for a 22.5% interest in the Seruway Production Sharing Contract (Seruway PSC) located Offshore North Sumatra.

The Seruway PSC covers approximately 1,115,000 acres. Seven of sixteen wells previously drilled in the Seruway PSC resulted in hydrocarbon discoveries. The Seruway PSC is adjacent to GFI's Asahan PSC and Kambuna TAC where GFI is participating (35%) in the development currently underway in the Kambuna and Tanjung Perling fields.

According to GFI, the Seruway PSC contains five highly attractive Greenfields: Gurame, Salem, ONS B-1, NSO-2 and Teripang. In addition, GFI has identified more than ten seismically defined exploration prospects located in the Seruway PSC.

Efforts are currently underway to initiate the delineation of the Gurame structure, said the company. GFI has committed to initially fund from current cash reserves a US $5 million 3-D seismic program planned for the second half of 2006. GFI will also fund from a future financing a substantial portion of up to US $12 million for an exploitation well planned for 2007.

Third party reports submitted to Pertamina in the late 1990's by former licensees, document reserve potential of greater than 500 BCF in the Gurame structure. The reports also estimate that reserve potential in the exploration prospects and the other four Greenfields may be in excess of 5 TCF, said the company. (denny)