GSS Energy makes hydrocarbon discovery in Trembul operating area

By Romel S. Gurky

SGX-listed GSS Energy Limited said on Wednesday that its subsidiary PT Sarana GSS Trembul (PT SGT) has completed the first phase of its first well in the Trembul Operating Area in Central Java, Indonesia, (Well SGT-01) pursuant to the Kerja Sama Operasi scheme (KSO Scheme) with Indonesia?s state-owned upstream company PT Pertamina EP.

The group holds an 89 percent economic interest in PT SGT and is the operator for the Trembul KSO block while the remaining 11 percent is held by the Central Java Provincial Government-owned enterprise.

GSS said in a statement that PT SGT started spudding Well SGT-01 in late September 2017 and has drilled up to 1,255 meters in depth under the KSO Scheme signed with Pertamina in 2016. ?Well SGT-01 discovered eight columns of hydrocarbon bearing sandstone reservoir with 37 meters of total net pay zone,? the statement said.

The company said that Pertamina has agreed to commence commercialization of two of the eight zones at a depth of 863 ? 869 meters and 910 - 915 meters respectively within the lower Ngrayong formation. An estimated 1.5 million standard cubic feet per day (MMSCFD) of sweet gas (91% CH4 with no H2S and a negligible amount of CO2) plateau production can be expected for 14 years. The preliminary in-house well basis estimates for 1P recoverable reserve for the two gas zones was 8.49 BCF (billion cubic feet) of sweet gas, while the 1P recoverable reserve estimates for the other six oil zones stands at 2.83 MMBBLS (million barrels). ?Barring any unforeseen circumstances, the monetization of the two gas zones is expected to be in 2018,? GSS said.

In addition, GSS said it is in active discussions with Pertamina on harvesting the other pay zones as well.

In-line with the group?s strategy of securing onshore oil projects with proven oil reserves, GSS said it will be exploring additional production of oil by commencing workover programs in some selected potential wells previously drilled by Nederlandsche Koloniale Petroleum Maatschappij (known as Stanvac). From 1935 to 1942 before these oil fields were being abandoned, the wells delivered up to 640 barrels of oil per day (BOPD).

The data obtained from Well SGT-01 has opened up uncovered perspective for Well P1, an exploration well previously drilled by Pertamina in 2005, in which three potential zones were left unrecognized at that time due to inconclusive low resistivity wireline readings which are now supported by discoveries of hydrocarbon at SGT-01. GSS said it intends to re-enter Well P1 with a dedicated workover program to maximize the commercialization of the potential oil zones.

Commenting on the completion of the drilling and the hydrocarbon discovery, Sydney Yeung, CEO of GSS Energy, said, ?It was a remarkable achievement that we will remember for 2017. Over the past two years, our management and operations team have become increasingly stable and experienced, and our thorough planning, diligent execution, and the persistent hard work paid off.

Not only that the hydrocarbon discovery will be commercialized in the foreseeable future, the data obtained is also positive and will be used for our other oil zones. With the favorable commercial terms, our oil & gas business is expected to enhance the revenue and profit of the Group. GSS Energy will have a twin engine consisting of both the precision engineering and oil & gas businesses going forward, and we are determined to bring the financial performance to the next level.?

Editing by Reiner Simanjuntak