Lion: Production at Seram PSC up 18%

By Romel S. Gurky

ASX-listed Lion Energy Ltd said Thursday that despite the weak price environment, average daily production at the Seram (Non-Bula) PSC, onshore Seram Island, eastern Indonesia, increased by 18 percent last year to 3,346 bopd (84 bopd net to Lion) compared to the previous year.

Lion, which via its wholly owned subsidiary Lion International Investment Ltd holds a 2.5 percent participating interest in the Seram PSC, said in a statement that it received sales revenues of US$1.38 million for the year.

Meanwhile, average daily oil production in the fourth quarter ending December 2015 increased 16 percent to 4,042 bopd (95 bopd net to Lion) from 3,488 bopd in the previous quarter, driven by successful drilling and completion of the past four development wells (Oseil- 21, 26, 27 and 28), which together contributed approximately 2,915bopd during December of this reporting quarter, Lion said.

Gross crude oil production for the quarter was 371,891 barrels (8,774 bbl net to Lion). A crude oil lifting of 425,123 bbl was completed on December 22, 2015 (Lion share 10,628 bbl). Lion said its share of gross lifting revenue, estimated at approximately US$0.3 million, is expected to be received in early February 2016.

The company said daily production rate at the close of the quarter of 4,132 bopd bodes well for further increment in the current quarter. This compares to 4,053 bopd at the end of the previous quarter. The completion of development well Oseil-22 and planned drilling of Oseil-23 in the first quarter 2016 is anticipated to further lift production. The operator continues to focus on tight cost control and combined with the rising oil rates the Seram PSC production is profitable at current oil prices.

In other activities, Lion said good progress has been made on the unconventional joint studies. The final meeting with the regulator, which marks the completion of the studies, are scheduled for early 2016. Planned drilling in the South Block A PSC remains on track for a May 2016 spud. During the quarter Lion CEO Kim Morrison and senior advisors travelled to Banda Aceh to meet with the Governor of Aceh, Mr. dr. H. Zaini Abdullah, and his staff to discuss growing Lion?s involvement in the province.

Lion?s CEO, Kim Morrison noted: ?Lion continues to make progress across our business despite the challenging industry environment. While reducing costs in response to continued weak oil prices continues to be a key objective across our assets, we are pleased with ongoing production increase from the Seram project. At the same time, we continue to pursue affordable, attractive new opportunities with a focus on production and appraisal assets in the region.?

Editing by Reiner Simanjuntak