Lion Energy updates Indonesian ops
Tuesday, July 29 2008 - 05:01 AM WIB
1. 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 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 7,243,303 barrels as at June 30th 2008.
1.1. PRODUCTION
During the quarter crude oil production from the Seram (Non-Bula) Block PSC was 353,605 barrels of crude oil at a daily average of 3,886 BOPD over the quarter.
| YEAR 2008 | ||||
| MONTH | CRUDE OIL (BOPM) | CRUDE OIL (BOPD) | HSFO (BOPM) | NAPTHA (BOPM) |
| APRIL 08 | 114,300 | 3,810 | 81,075 | 5,671 |
| MAY 08 | 121,675 | 3,925 | 90,849 | 5,610 |
| JUNE 08 | 117,630 | 3,921 | 87,557 | 5,911 |
1.2. WELL SERVICING
On April 23rd 2008 a workover was completed on Oseii-7. The workover rig then moved to Oseil-6 where a workover was completed on May 6th and the well returned to production on May 7th 2008.
1.3. OPERATIONS
Drilling Nief Utara A-1
On March 6th 2008, the Company advised that exploration well Neif Utara A-1 spudded on February 28th at 10:00 AM in the Seram (Non Bula) Block Production Sharing Contract on the island of Seram in eastern Indonesia.
Neif Utara A-1 drilled to a total depth of 7,315 feet rotary kelly bushing measured depth (RKB MD) and was then completed as a future oil producer.
Flow testing results:
? In the 16 hours prior to shutin for buildup, the well flowed on Electric Submersible Pump (ESP) on a 20/64 inch choke at a stabilized rate of approximately 640 BOPD.
? Crude oil gravity measured at 0.952, corrected to 15 deg F.
? The gas oil ratio (GOR) was measured over the period at a stabilized rate of 0.23 Mscf/BBL.
? Water cut during the period was less than 1%.
? The well was shut-in at 17:00 May 8th 2008. Flowing wellhead pressure (WHP) at shut-in was 538 psig.
The drilling rig was released from Nief Utara A-1 on May 9th 2008.
The Operator has submitted an application to the Indonesian Government agency (BP Migas) for putting the well on production and is awaiting approval.
Drilling Nief Utara A-2
The drilling rig was skidded from Nief Utara A-1 to Nief Utara A-2. Nief Utara A-2 is being drilled from the same surface location as Nief Utara A-1, as a deviated well and will drill to a final bottom-hole location some 1000 metres SE of the Nief Utara A-1 well bottom-hole location.
Delineation well Neif Utara A-2 spudded on May 19th 2008.
It is intended that Nief Utara A-2 will drill to penetrate the water contact, to assist in reserves evaluation of the Nief Utara A structure.
The primary target of Nief Utara A-2 is the Manusela Carbonate, with the secondary target the lower part of the Lower Nief carbonate in which an indication of oil show was observed from drill-cuttings in the Nief Utara A-1 well.
Overview Nief Utara A
The Neif Utara A prospect is an elongate thrust and reverse-fault controlled four way dip closed antidine, situated at the southeast end of the Oseil high trend, along the Oseil ? East Neif anticlinorium.
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 3,800 BOPD, with cumulative production to 30 June 2008 of 7,243,303 barrels of crude oil.
For the Nief Utara A prospect, deterministic initial oil in place (IOIP) was initially estimated at 34 million standard barrels of crude oil (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 Neif Utara A prospect, with reserves at 12.5 MMSTBO using a 30% recovery factor.
Subsequent Event Nief Utara A-2
On July 14th 2008, the Company released an update on the progress of Nief
Utara A-2, advising:
? 13-3/8 inch casing was cemented at 1,224 metres (4,016 feet).
? Routine drilling operations continued to a depth of 1,844 metres (6,050 feet).
? 9-5/8 inch casing was cemented at 1,840.6 metres (6,039 feet).
? Drilling continued to 2,125 metres (6,975 feet) MD / 1,912.5 metres (6,275 feet) TVD.
Electric logs have now been run and a 7 inch liner set at 2,125 metres (6,973 feet) RKB MD.
Current operations are perforating the 7 inch liner.
Subsequent Event - Drilling Dawang-1
On July 14th 2008, the Company announced the spudding of exploration well Dawang-1 at 17:00 hours eastern Indonesian time on July 13th 2008, in the Seram (Non Bula) Block Production Sharing Contract on the island of Seram in eastern Indonesia.
The Dawang-1 well is located approximately 25 kilometres southeast of the Bula Oilflelds.
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 lines over the producing Bula Oilfields.
The well is shallow, with a proposed Total Depth of 2,133 feet sub sea. Drilling is expected to take 14 days, with additional time required for completion in the event of discovery.
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 resource is estimated to contain 37.3 million barrels of oil in place, with a recoverable resource estimated at 9.3 million barrels of oil, assuming a 30% recovery factor.
13-3/8 inch casing has been set and cemented at 230.1 metres (755 feet) and the current operation at July 25th 2008 was conducting a Leak of Test at the 13-3/8 inch shoe, prior to drilling ahead in 12 inch hole. (end of excerpt)