Lion Energy reports Indonesian oil production, exploration
Friday, October 24 2008 - 01:19 AM WIB
SERAM (NON-BULA PSC)
LION ENERGY LIMITED, through its wholly owned subsidiary Lion Petroleum Seram Limited, holds a 2.5% shareholding in the Seram (Non Bula) Block Production Sharing Contract. The major shareholder and Operator of the Joint Venture is CITIC Seram Energy Limited (51%), KUFPEC (Indonesia) Limited with 30% and Gulf Petroleum Investment (16.5%). C1TIC is the Operator for the Joint Venture.
The block contains the Oseil oilfield which has since initial field start-up in January 2003, produced cumulative crude oil production of 7,605,813 barrels as at September 30th 2008.
PRODUCTION
During the quarter crude oil production from the Seram (Non-Bula) Block PSC was 363,440 barrels of crude oil at a daily average of 3,950 BOPD over the quarter.
| YEAR 2008 | ||||
| MONTH | CRUDE OIL (BOPM) | CRUDE OIL (BOPD) | HSFO (BOPM) | NAPTHA (BOPM) |
| JULY 08 | 121,210 | 3,910 | 98,273 | 6,540 |
| AUGUST 08 | 122,140 | 3,940 | 70,467 | 4,063 |
| SEPT 08 | 120,090 | 4,003 | 109,725 | 7,091 |
WELL SERVICING
On September 24th 2008 Oseil Tenggara-1 well was returned to production following a work-over to change out the failed ESP unit.
OPERATIONS
Nief Utara A-1
Nief Utara A-1 spudded on February 28th2008 and was drilled to a total depth of 2,229.5 metres (7,315 feet) RKB MD and completed as a future oil producer.
The drilling rig was released from Nief Utara A-1 on May 9th 2008.
The Operator submitted an application to the Indonesian regulatory agency and following approval on July 31, 2008, production commenced on August 17th 2008.
An initial conservative production rate of between 100 and 150 barrels per day was incrementally increased to between 400 - 450 BOPD. Water cut was been closely monitored and in mid September 2008, a water rate increase was noted. The rate of production was cut back and the water cut has subsequently stabilized at approx. 16% at a rate of approximately 270 BFD.
Nief Utara A-2
Delineation well Nief Utara A-2 spudded on May 19th 2008.
The rig was released on August 9th 2008 after the well reached total depth of 2,126.9 meters (6,975 feet) MD or 1,825.7 meters (5,990 ft) TVD SS.
As a result of the well penetrating the oil/water contact, reserve estimates where able to be confidently revised. This also necessitated the casing of the Manusela Carbonate (left open hole in Nief Utara A-1) with a 7 inch liner. This required subsequent perforating over the production interval.
The well was subsequently tested with the final rate 372 BOPD with a 12% water cut. The unstable rate during testing suggests the well may not have cleaned up.
Application has been made to the Indonesian regulatory agency to place the well on production and at the time of this release that approval had not yet been received.
Nief Utara A-3
Delineation well Nief Utara A-3 spudded on August 20th 2008 and is a deviated well targeting a bottom hole location some 1,301.4 meters (4,270 feet) from the drilling location in an approximate WSW direction.
The primary target is the Manusela Carbonate and the secondary objective is the Lower Nief formation, which whilst shows have been recorded in Nief Utara A-1 and Nief Utara A-2 remains untested.
At October 18th, the well had reached 2,200.8 metres (7,221 feet) RKB MD, at which point electric logs were being run.
The last casing set was 13-3/8 inch at 1,373.1 metres (4,505 feet).
Overview Nief Utara A
The Nief Utara A prospect is an elongate thrust and reverse-fault controlled four way dipdosed anticline, situated at the southeast end of the Oseil high trend, along the Oseil - East Nief antidinorium.
The primary target is the Manusela Carbonate, interpreted to be similar in reservoir characteristics to the nearby Oseil oilfield, which is currently producing at approximately 3,900 BOPD, with cumulative production to 30 September 2008 of 7,605,813 barrels of crude oil.
For the Nief Utara A prospect, deterministic IOIP was estimated at 34 MMSTBO, and reserves at 10.2 MMSTBO using a 30% recovery factor.
Based on the results from Nief Utara A-1, IOIP has been upgraded to 42 MMSTBO for the Nief Utara A prospect, with reserves at 12.5 MMSTBO using a 30% recovery factor.
East Nief-1 (re-entry)
The 750 HP rig ABS #2 began moving from Dawang-1 to East Nief-1 on August 6th 2008.
East Nief-1 was drilled in 1988 to a TD of 2,011.6 metres (6,600 feet) RKB and temporarily suspended after six (6) DST?s were conducted, several of which recovered oil.
In 1988 the Manusela carbonate was not well understood. Subsequent wells at Oseil and Nief Utara A have provided the joint venture the opportunity to observe the formation during drilling (to continually modify drilling techniques) and during production (with over 7 million barrels produced from Oseil since the field was placed on production).
The acquisition of the 3D seismic over the Oseil field has also enabled the joint venture to re-interprete the East Nief closure.
Preliminary estimates of oil in place are 413 MMBBLS and applying a 23% recovery factor recoverable reserves are estimated at 95 MMBBLS.
The purpose of the re-entry at East Nief-1 is to produce oil under test, using a downhole Electric Submersible Pump (ESP), from the Manusela Carbonate formation.
During the re-entry the 7 inch packer at 1,726 metres (5,663 feet) RKB was milled and pushed down to bottom at 1,777.8 metres (5,833 feet) RKB (PBTD). The following intervals were re-perforated: 1,679.7 - 1,696.4 metres (5,511 - 5,566 feet) RKB and 1,631.2 - 1,664.1 metres (5,352-5,460 feet) RKB.
An ESP was set at 1,608 metres (5,276 feet) RKB and the rig was released on September 12th 2008.
In mid October 2008, well testing was in progress. The well was flowing fluid at approximately 220 BFD with an 83% water cut. The gas rate was approximately 0.004 MMscfD.
Testing will continue and a acid stimulation is being planned.
Dawang-1
Exploration well Dawang-1 spudded on July 13th 2008.
The Dawang-1 well is located approximately 25 kilometres southeast of the Bula Oilfields.
The Dawang prospect is a seismically defined closure on a faulted structural nose within the Fufa Formation. It features clearly defined seismic amplitude anomalies seen on consecutive lines, believed to be direct indicators of trapped hydrocarbons as seen on seismic tines over the producing Bula Oilfields.
The Bula Oilfields in the Bula Basin are the only commercial producing fields from the Plio-Pleistocene Fufa Formation in eastern Seram. Dawang-1 was selected to test seismic and geological trends that have a similar appearance to the Bula Oilfield, which was discovered in 1897 and from which the main producing field Bula Lemun has produced in excess of 16 million barrels of oil.
The rig was released from Dawang-1 on August 8th 2008 after the well reached TD of 655.3 meters MD (2,150 feet) or 644.9 meters (2,116 feet) MD SS.
Electric logs indicated a gas zone across the interval 433.7 - 439.5 meters (1,423 - 1 ,442 feet) MD SS in the Matafoten A10 sand.
Preliminary reserve estimates (base case) of the gas reserve indicate potential gas in place of 3.62 BCF, with a recoverable reserve of 1.81 BCF based upon a 50% recovery factor.
The well was temporarily suspended pending testing when a suitable rig becomes available. This work is anticipated in the following quarter.
The deeper seismic anomaly at the Base Fufa level could not be tested in this well. The joint venture has approved a follow-up well in the 2009 Work Program, Dawang-2, to test the Matafoten in the downthrown fault block to the west of Dawang-1 and this well will also test the Base Fufa objective.
The potential gas reserve discovered in this well is relatively small and in an area where no commercial market for the gas currently exists. Flow testing is required to fully evaluate this discovery. (end of excerpt)