Lion reports higher production from Seram PSC

By Romel S. Gurky

ASX-listed Lion Energy Limited report on Monday a solid fourth quarter operating performance in which the company continued to build on its business plan.

The company said in a statement that production from the Seram PSC continued to perform solidly during the quarter ending December. Average daily oil production was 3,512bopd (83bopd net to Lion) for the quarter, up marginally from 3,497bopd the previous quarter. Production at quarter end was 3,503bopd.

Gross crude oil production for the quarter was 323,125bbl (7,624bbl net to Lion), with operating costs for the quarter of US$15.95/bbl. Calendar year operating cost of US$14.34/bbl was down 36 percent from the previous year following the concerted effort within the joint venture to reduce costs.

Lion, via its wholly owned subsidiary Lion International Investment Ltd, holds a 2.5 percent participating interest in the Seram (Non-Bula) Block PSC, located onshore Seram Island in eastern Indonesia.

In the South Block A PSC in Aceh, Lion increased it?s equity to 40.7 percent. Whilst the spudding of the shallow low-risk Amanah Timur oil and gas prospect (AMT-1) in the block was delayed slightly due to an earthquake in North Sumartra, post quarter end the well was drilled to total depth of 347 meters and encountered strong gas and good oil shows in a number of interpreted hydrocarbon zones. The well was plugged and abandoned as a discovery following unsuccessful attempts to free stuck drill pipe. ?Importantly, the drilling of the well completes the PSC?s firm commitments and, post quarter end, the joint venture was advised by the Indonesian regulator the block has been extended for an additional four years,? Lion said.

The AMT-1 well spudded on January 3, 2017 and while the well was plugged and abandoned, it was an encouraging discovery with appraisal planning already underway

At the end of the quarter, the company said it had cash of US$990,000, plus Lion?s share of cash in joint venture bank accounts maintained by the operator of approximately US$290,000. A successful capital rasing was completed in December 2016, with A$650,000 raised at a price of A$0.05/ordinary share including directors subscribing for $110,000 of shares which will be issued subject to shareholder approval. Proceeds of US$519,345 from a crude oil lifting of 500,235bbl (Lion share 11,802bbl) completed in December 2016 are expected to be received in early February 2017.

Lion?s CEO, Kim Morrison, noted ?Lion achieved a solid quarter with continued good production from Seram benefiting from the higher oil price environment. Post quarter end operations were completed on the AMT-1 discovery well and the Company is now actively pursuing appraisal options. A successful capital raising of A$650,000 positions Lion well for an active 2017 with strong focus on growth.?

Editing by Reiner Simanjuntak