Lion to farm out South Block A

By Febry Silaban

ASX-listed Lion Energy is planning to farm out its interest in the South Block A in North Sumatra.

This is said by a senior official of Lion Energy on the sidelines of Farm Out Forum at SEAPEX Conference in Singapore, Thursday.

"The block is underexplored, although the adjacent area contains large oil and gas fields and infrastructure," said the official.

The firm will start to drill a shallow low risk oil and gas exploration well in the block in the first quarter of next year.

Lion has a 35 percent interest in the South Block A PSC through its wholly owned subsidiary KRX Energy (SBA) Pte Ltd, while Renco Elang Energi operates the block with 51 percent interest. The remaining is held by PT. Prosys Oil & Gas International (POGI). The PSC is centrally located in the North Sumatra Basin and contains large gas and overlooked oil volume potential.

Elsewhere, Lion said that during 2014, a 183km 2D seismic survey was successfully shot, processed and at year end was being interpreted to validate the prospects identified in the block. The seismic program was part of the minimum work commitments pursuant to the South Block A PSC award.

Field crews commenced line clearing at the start of 2014 and steady progress was made throughout the year culminating in the surveying and drilling being completed by March 31, 2014 and seismic recording completed on April 2, 2014. The survey was completed on budget with a good safety record. A total of 1,074,355 man hours were recorded with one lost-time injury reported through to completion of the survey. Approximately 445,877 vehicle kilometers were driven during the program, Lion explained.

The firm also said a 400-mmscfd pipeline has been constructed that will transport gas from Aceh to North Sumatra. The pipeline is reported to be an open-access pipeline with approximately 200 mmscf spare capacity. The pipeline was completed at the end of 2014. This provides a potential commercialization option for any gas discovered by the South Block A joint venture, the firm said.

Editing by Johannes Simbolon