Lion Energy reports higher Q1 production from Seram PSC

By Ruli Setiawan

ASX-listed Lion Energy Limited reported on Wednesday its gross crude oil production from the Seram Project was 2,577 bopd in the first quarter of the year, up from 2,464 bopd in the previous quarter.

Lion?s share of oil sales revenues of US$618,121 was received from a lifting in late December. An independent reserve report for the Oseil fields as at December 2013 included positive revisions in proven reserves which partially offset production for 2013, representing a reserves replacement ratio of 53 percent, the company said in a statement.

Development drilling in Seram was ongoing with the completion of the Oseil-26 well in January, which at end of the quarter was producing at approximately 560 bopd (against 300 bopd forecast). The Oseil-21 development well is progressing well and due to come on stream in May, and after a short period of rig refurbishment, the Lofin-2 appraisal well of the exciting 2012 Lofin discovery is due to spud in July/August, according to the company.

Lion, via its wholly owned subsidiary, Lion International Investment Ltd, holds a 2.5 percent participating interest in the Seram (Non-Bula) Block Renewal Production Sharing Contract, located onshore at Seram Island in eastern Indonesia. The major equity holder and operator of the joint venture is CITIC Seram Energy Ltd (51 percent). Other partners are KUFPEC (Indonesia) Ltd (30 percent) and Gulf Petroleum Investment (16.5 percent).

Elsewhere, the South Block A (SBA) PSC in North Sumatra seismic program progressed well with encouraging preliminary results, and the joint venture approving acquisition of three additional lines over the shallow Paya Bili oil lead. Recording of the 183km survey was completed post-quarter?s end on 2 April 2014. The survey is anticipated to be completed on budget with data processing ongoing; the focus is to firm up a target for drilling in 2014.

The underexplored block is centrally located in the prolific North Sumatra Basin and contains large structures with attractive gas and oil plays. After quarter?s end, on April 2, 2014, acquisition of a 183 km 2D seismic survey was completed. This targeted the Simpang, Djerneh, Amanah, Sungai Iyu lead and the Paya Bili leads. Interpretation of the new seismic survey will enable an attractive shallow oil target, with near-term commercialisation potential, to be selected for the planned 2014 drilling program. A deeper gas/condensate target will be selected for a planned 2015 drilling campaign

Lion?s CEO Kim Morrison said: ?With the transaction complete we are now rolling up our sleeves to deliver on Lion?s business plan. The South Block A seismic has been completed on budget with a commendable safety record, and there is strong Seram production in addition to advances in unconventional new business opportunities.?

Editing by Johannes Simbolon