Lion: Oseil proven oil reserves upgraded
Tuesday, March 1 2016 - 12:54 AM WIB
ASX-listed Lion Energy Ltd said on Tuesday that proven (1P) oil reserves at Oseil field in Seram (Non Bula) PSC, onshore Seram Island, eastern Indonesia, increased by 28 percent (or 1.36 mmbbl) due to success of development drilling program in 2014/2015.
Lion, which has a 2.5 percent interest in the PSC, said in a statement that production from the Seram PSC remains strong at approximately 4200 bopd (105bopd net to Lion) and the joint venture is implementing aggressive cost saving measures, including suspending future development drilling (including the planned Oseil-23). This is anticipated to allow increased free cash flow from the Seram PSC.
Commenting on the reserve report and Seram PSC activities, Lion CEO Kim Morrison said: ?The increase in Oseil area reserves by well-respected firm DeGolyer & MacNaughton is a pleasing outcome and reflects the positive development drilling outcomes on the Oseil field in recent times. At the same time the operator is responding to the current oil price environment and prudently reducing costs while continuing to work on development options for the exciting Lofin gas discovery including ongoing engagement with relevant authorities on extension of the PSC beyond 2019.?
Lion said an updated reserves report for the Seram PSC, commissioned by the operator of the project, by US experts, DeGoyler & McNaughton (D&M), was received on February 22, 2016. The report is effective December 31, 2015 and is based on 2015 gross production of 1221mbbl (3345 bopd). The Proven (1P) reserve estimate at end 2015 is 4881mbbl compared to 4746mbbl at end 2014. When the 2015 production is taken into account the report shows an increase in Proven reserves from the Dec 2014 figure of 1356 mbbl.
The December 31, 2015 Proven reserves are classified into Proven-Developed reserves of 3833mbbl and Proven-Undeveloped reserves of 1048mbbl. This compares with December 31, 2014 estimates of 2409mbbl and 2337mbbl, respectively. The increase of in the overall Proven and more particularly the Proven (Developed) numbers reflects the successful development drilling in the Oseil 2 area of the Oseil field during 2015. The Proven-Developed number in the D&M report does not assume any further development wells being drilled.
Lion, via its wholly owned subsidiary Lion International Investment Ltd, holds a 2.5 percent participating interest in the Seram (Non-Bula) Block PSC. The major equity holder and operator of the joint venture is CITIC Seram Energy Ltd (51%). Other partners are KUFPEC (Indonesia) Ltd (30%) and Gulf Petroleum Investment (16.5%).
| Reserves | D&M Reserves (mmbbl, Gross) | D&M Reserves (mmbbl, net to Lion) | ||||
| ? | Proven (1P) | Proven &Probable (2P)2 | Proven, Prob & Poss. (3P)2 | Proven (1P) | Proven &Probable (2P)2 | Proven, Prob & Poss. (3P)2 |
| EOY 2014 | 4,746 | 6,907 | 9,641 | 118.65 | 172.68 | 241.03 |
| Production | -1,221 | -1,221 | -1,221 | -30.53 | -30.53 | -30.53 |
| Revision | 1,356 | 420 | 242 | 33.90 | 10.50 | 6.05 |
| EOY 2015 | 4,881 | 6,106 | 8,662 | 122.02 | 152.65 | 216.55 |
| ? | ? | ? | ? | ? | ? | ? |
| Contingent Resources | D&M Contingent Oil Resources4, 5 (Gross) | D&M Contingent Oil Resources4, 5 (Net to Lion) | ||||
| ? | 1C (mbbl) | 2C (mbbl) | 3C (mbbl) | 1C (mbbl) | 2C (mbbl) | 3C (mbbl) |
| EOY 2014 | 1,442 | 3,106 | 39,146 | 36.05 | 77.65 | 978.65 |
| Revision | 143 | -426 | -21,583 | 3.58 | -10.65 | -539.58 |
| EOY 2015 | 1,585 | 2,680 | 17,563 | 39.63 | 67.00 | 439.08 |
Editing by Reiner Simajuntak