Lion says Seram production outperform expectations

By Romel S. Gurky

ASX-listed Lion Energy Ltd said that production at the Seram (Non-Bula) PSC, on shore Seram Island, in the eastern part of Indonesia, continued to out-perform expectations in the second quarter of this year following completion of the Oseil-21 well.

The company said in a statement Thursday that average production during the quarter ending June of this year was 2,818 bopd, up from an average of 2,577 bopd in the previous quarter. (Production increased consistently over the quarter and averaged nearly 3,000 bopd in June).

?Lion?s net share of oil sales revenue s of US$841,613 was received in late June from an oil lifting of 357,786 bbl on 26 May 2014,? it said.

The current development drilling program on the Oseil field was completed with the Oseil-21 well which came on stream on 6 May 2014, Lion said.

?At end of the quarter the well was producing at approximately 500 bopd, in line with pre-drill expectations. Attention is now focused on the appraisal of the exciting 2012 Lofin discovery,? Lion said.

It added that detailed review was undertaken of the Lofin-1 discovery well and the drilling rig has undergone a period of refurbishment and upgrading, with the scheduled spud of Lofin-2 in late-September 2014.

The company, through its wholly owned subsidiary Lion International Investment Limited (LII), holds a 2.5 percent shareholding in the Seram (Non Bula) PSC joint venture (Seram Project). The PSC is located onshore on the island of Seram, in Eastern Indonesia and has an area of 1,524 km2.

In the company?s other core asset, the South Block A PSC, the seismic program was completed early in the quarter and interpretation is ongoing, the statement said.

?The interpretation appears to be confirming an attractive, shallow, low-risk target for drilling in late-2014, subject to logistics being able to accommodate that timing,? it said.

Lion has a 35 percent interest in The South Block A PSC through its wholly owned subsidiary KRX Energy (SBA) Pte Ltd. The PSC is centrally located in the North Sumatra Basin and contains large gas and overlooked oil volume potential.

Lion?s CEO, Kim Morrison, said: ?We continue to be encouraged by production from Seram outperforming our budget forecast by over 300 bopd, whilst looking forward to drilling the exciting Lofin-2 appraisal well. The South Block A seismic was completed safely, on budget and interpretation of the processed data is looking positive. On the new business side, we are currently concentrating efforts in developing linked conventional opportunities within the unconventional portfolio. With the Indonesian presidential e lection now completed, our focus is also on accelerating our unconventional applications through the remainder of 2014.?

Editing by Reiner Simanjuntak