Lion: Seram well boosts oil production by 20%, new drilling programs planned

By Ruli Setiawan

ASX-listed Lion Energy Ltd reported Tuesday that the recently completed Oseil-26 development well in eastern Indonesia is performing at above pre-drill expectations.

The well was completed on 30 January 2014 and has been producing crude oil at an average rate of 490 bopd (12.5 bopd net to Lion?s interest). This compares with pre-drill predicted initial production of 300 bopd.

Oil production from Oseil and surrounding oilfields has averaged 2,831 bopd (71bopd net to Lion), an increase of 20 percent from the approximate 2,350 bopd prior to Osiel-26 coming on line. Production currently exceeds guidance production of 2500 bopd in Lion?s prospectus issued on 6 November 2013.

Elsewhere, Lion said that the Oseil-21 development well, due to spud this week, is designed to exploit undrained oil reserves on the western flank of the Oseil-2 fault block. Drilling is expected to take about 90 days and, if successful, the well should commence production in May 2014.

Following Oseil-21, the joint venture plans to drill the Lofin-2 well to appraise the exciting Lofin-1 discovery made in 2012. Current scheduling has the well spudding in July 2014 following the completion of Osiel-21.

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

Editing by Reiner Simanjuntak