Lion Energy reports Indonesian oil production, exploration
Wednesday, April 22 2009 - 04:29 AM WIB
SERAM (NON-BULA) PSC
(2.5% contractor interest held through wholly owned subsidiary Lion Petroleum Seram Limited)
LION ENERGY LIMITED, through its wholly owned subsidiary Lion Petroleum Seram Limited, holds a 2.5% shareholding in the Seram (Non Bula) Block Renewal 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%). CITIC 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 7,992,693 barrels as at March 31st 2009.
As part of a corporate restructure, the Company?s Participating Interest in the Seram (Non Bula) Block Renewal Production Sharing Contract is being assigned from Lion Petroleum Seram Limited to Lion International Investment Limited. When this process is complete, Lion Petroleum Seram Limited will be de-registered once all regulatory obligations have been settled. The Indonesian regulatory body BP MIGAS has already approved the assignment. Joint Venture execution of the assignment Deed is in process at 16th April 2009.
PRODUCTION
During the quarter crude oil production from the Seram (Non-Bula) Block PSC was 243,650 barrels of crude oil at a daily average of 2,707 BOPD over the quarter.
| YEAR 2009 | ||||
| MONTH | CRUDE OIL (BOPM) | CRUDE OIL (BOPD) | HSFO (BOPM) | NAPTHA (BOPM) |
| Jan 09 | 87,110 | 2,810 | 93,300 | 6,808 |
| Feb 09 | 76,188 | 2,721 | 64,425 | 4,335 |
| March 09 | 80,352 | 2,592 | 63,152 | 4,494 |
OPERATIONS
Nief Utara A-1
Production at Nief Utara A-1 has declined to approx. 160 BFPD in March 2009 from approx. 450 BFPD in September 08 whilst water cut has increased from minimal to approx. 29% over the same period. The operator is reducing the choke size to control the water cut.
Nief Utara A-1 spudded on February 28th 2008 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, and production commenced on August 17th 2008.
Nief Utara A-2
This well is currently suspended pending further evaluation.
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.
The well was subsequently tested with the final rate 372 BOPB with a 12% water cut in early August 2008. The unstable rate during testing suggests the well may not have cleaned up.
However production of oil declined rapidly, to 100% water, at which time the well was shut-in for evaluation of results. The well has a low productivity index and high water cut.
Nief Utara A-3
This well is currently under evaluation, following testing, during which in excess of 2,000 barrels of fluid was recovered. The well was flowing 100% formation water when it was finally shut-in.
Delineation well Nief Utara A-3 spudded on August 20th 2008.
9-5/8 inch casing was set at 2,168.2 metres (7,114 feet) RKB MD. The well encountered mud loss and an oil kick just below the 9-5/8 inch casing in the upper part of the target reservoir carbonate in the Manusela Formation.
The well was drilled to 2,388.3 metres (7,836 feet) RKB MD.
After completing open hole logging operations, an ESP completion was then run and the well tested on a 48/64 choke. Total recovery was 2,076 barrels of fluid at a production rate of approximately 1,000 BFPD. Water cut was 100%
Two unsuccessful attempts were made to set cement plugs across the interval 2,240 metres to 2,286 metres (7,350 feet to 7,500 feet).
Following an injectivity test conducted in January 2009, a proposed acid job was cancelled as an injection rate could not be achieved due to tight formation.
Overview Nief Utara A
The results at Nief Utara A closure have been very disappointing. Following initial success at Nief Utara A-1, Nief Utara A-2 and A-3 where drilled. Neither produced commercial quantities of crude oil. Nief Utara A-1 oil rate has declined since coming on line and the water cut is steadily increasing.
The Seram Joint Venture will conduct further evaluation of results to attempt to unlock the significant crude oil reserves in the reservoir closure.
The Nief Utara A prospect is an elongate thrust and reverse-fault controlled four way dip closed anticline, situated at the southeast end of the Oseil high trend, along the Oseil - East Nief anticlinorium.
The primary target at Nief Utara A is the Manusela Carbonate which is more matrix dominated compared with Oseil field which is currently producing at approximately 2,500 BOPO with cumulative production to March 31st 2009 of 7.950.945 barrels of crude oil. The Manusela formation at the Oseil field is more fracture dominated.
Based on the results from Nief Utara A-1, IOIP has been re-evaluated to 36 MMSTBO for the Nief Utara A prospect, with Gross Ultimate Oil Recovery of 14.8 MMSTBO using a 41% recovery factor.
East Nief-1 (re-entry)
Like the Nief Utara A structure, the East Nief structure holds a very sizeable resource. Oil was discovered in 1988 at East Nief-1, however the well failed to deliver commercial flows at the time.
The re-entry program undertaken by the current JV was commenced in August 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-interpret the East Nief closure.
Preliminary estimates of oil in place are 81 MMSTB (3P) and applying a 19.4% recovery factor, the Gross Ultimate Oil Recovery is estimated at 15.8 MMSTB.
The purpose of the re-entry at East Nief-1 was to produce oil under test, using a downhole Electric Submersible Pump (ESP), from the Manusela Carbonate formation.
In summary, the results of the re-entry were disappointing. The reservoir produced at minimal rates with high water cuts. Whilst the closure is significant, the Joint Venture needs to evaluate the results to date to better understand the reservoir and to develop a plan to enable recovery of the significant resource within the reservoir closure.
Dawang-1
Plans are being prepared to test the gas discovery at Dawang-1. Whilst the commercialization of a relatively small reserve in such a remote location is not feasible, the gas is required for power generation at the Oseil Oilfield facility. The Oseil power generation facility was converted from diesel to natural gas produced in association with Oseil crude. However the associated gas rates have declined to the point where additional reserves are required for the longer term production of Oseil crude.
Exploration well Dawang-1 spudded on July 13th 2008.
The Dawang-1 well is located approximately 25 kilometres southeast of the Bula Oilfields.
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.
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.
Oseil-13 Development Well
Oseil-1 3 Development well spudded on January 5th 2009.
The Oseil-1 3 development well is being directionally drilled from the Oseil-2 well pad to the main target in the southern part of the Oseil-2 area at the different fault compartment. The well is intended to provide a take point for un-drained oil reserved in the southern part of the Oseil-2 field. The well will be drilled to TD at -5900 ft Subsea in the Manusela carbonate.
After drilling to 7,118 ft MD, electric log were run and an ESP unit run on 3 ?? EUE tubing to pump suction depth at 6,891 ft MD. The well tested with the following results: WHP 335 psi at rate 236 BFPD with total recovery of 118 bbls, WC 100 %, and CHI 18,000 PPM.
The last test result showed very low fluid entry and 100% water cut. The test was completed and the ESP completion pulled from the well.
The well was deepened to 7,268 ft MD at which point further electric logging was carried out.
Drilling then resumed to 7,853 ft MD and a further suite of electric logs was run after which cement plugs were set and the rig released on at 24:00 hrs (LT) on March 29, 2009.
It is suspected the drill string crossed a fault and re-drilled the same section downdip. The well has been temporarily suspended pending further evaluation. (end of excerpt)