Lion reports steady production, improving cash flow from Seram PSC
Friday, April 29 2016 - 04:38 AM WIB
ASX-listed Lion Energy Limited said it continues to have solid production from the Seram PSC, located onshore Seram Island in eastern Indonesia, and successfully completed two unconventional joint studies in North and Central Sumatra.
?In our South Block A PSC cost reduction measures are being implemented and discussions are ongoing on the commitment well timing with the regulator,? the company said in a quarterly report seen Friday, unveiling the quarterly progress of its key assets in Indonesia.
Average daily oil production from the Seram PSC increased 4 percent to 4,211bopd (99bopd net to Lion) for the quarter, from 4,042bopd the previous quarter, driven by successful drilling and completion of the past five development wells (Oseil- 21, 26, 27, 28 and 22). Gross crude oil production for the quarter was 383,186 barrels (9,041bbl net to Lion).
Operating cost for the quarter equate to US$15.27 per barrel. Proceeds of $295,833 from a crude oil lifting of 425,123bbl completed on December 22, 2015 (Lion share 10,628bbl) were received during the quarter.
A further lifting of 418,842 was completed on March 29, 2016 (Lion share 10,471bbl) at a price of $24.33/bbl. Proceeds of approximately $250,000 are expected to be received early May 2016.
On the unconventional joint studies, the final meeting with the regulator was held on February 19 for both the ?Bohorok Deep? and ?Bengkalis? areas. Final reports were well received and the joint studies are now formally completed. The government of Indonesia is reviewing options for including the joint studies in future unconventional gazettal rounds later in 2016 or 2017; at which point the Joint Study participant have the right to match the highest bid.
In South Block A PSC cost reduction have been achived including lower office costs and the joint venture is working with the Indonesian regulator to ensure the most attractive well is drilled to satisfy the drilling commitment in the block. Lion has also updated our assessment of the South Block A PSC prospective resources which confirms the highly material potential of the top ranked prospects.
At the end of the quarter the company had cash of US$1.75million (A$2.28 million).
?Lion continues make prudent progress on our key assets in the tough industry conditions. With suspension of development drilling activities, the Seram PSC is cash flow positive based on quarter end oil price and we are now working on the strategy for extending the PSC to allow the world-class Lofin gas/condensate field to be developed. The completion of two of unconventional joint studies is an important milestone and Lion continues to work on securing new opportunities,? said Lion CEO, Kim Morrison.
Editing by Reiner Simanjuntak