NuEnergy Capital Limited: Acquisition to create a CBM exploitation and development company
Thursday, December 3 2009 - 02:01 AM WIB
On 16 June 2009, the Company advised that IndonCBM, through its 95% owned Indonesian domestic entity, Trisula, had entered into a formal Cooperation Agreement with PT Pertamina Hulu Energi (Pertamina), a company within the Pertamina group (the Indonesian state owned oil and gas enterprise), for the establishment of a consortium to evaluate the South Sumatra II Project and the Tarakan Basin project in Kalimantan.
As previously announced to ASX on 8 November 2007, the Company has entered into an agreement to purchase all of the shares in IndonCBM, subject to shareholder approval (Acquisition).
South Sumatra CBM Concession II Project (Cooperation with Pertamina)
The South Sumatra Concession comprises an area of 650 square kilometres containing 10-40 meter thick, low rank coal seams ranging in depth from 350 -1300m with an average reported gas content of 158 scf/ton. The Concession appears robust for CBM development containing the thick sections of coal at optimal depths and located close to existing oil and gas infrastructure.
Existing Pertamina well sites, gas processing facilities and electrical grid, oilfield services and supply contractor facilities are expected to be re-usable. Produced gas can be delivered to market through pipelines passing across the concession area and an export gas trunk line to Java delivering gas to the national market. In addition, two further pipelines delivering gas to Sumatra power, fertilizer plants and petrochemical plants are understood to have spare capacity for CBM gas.
Rengat CBM Project (100% IndonCBM)
As a part of the tenement acquisition process, IndonCBM recently completed a Migas joint study, the results of which have defined an area of 2,995 square kilometers encompassing coal seams averaging 3-5 meters thick and from 450 to 1550m in depth. Preliminary studies by IndonCBM have projected gas content in the targeted areas to be approximately 118-160 scf/ton. Studies of the concession area have strongly suggested coal properties are most suitable for coal bed methane exploitation and commercial production and rank favorably with comparable global CBM producing basins. Existing oil field and gas pipeline offtake infrastructure is in place.
The infrastructure in place consists of inter-provincial roads, exploration wells infrastructure and waste water facilities for the palm industry. There is a gas pipeline across the Concession area from northern Sumatra to Java Island Processing Terminal which can be accessed for both pilot project and full commercialization production gas distribution. IndonCBM is of the view that the gas pipelines within the Concession area will enhance negotiations of gas ofttake purchase agreements from the project.
Tarakan Basin Project (Cooperation with Pertamina)
IndonCBM is also evaluating and progressing The Tarakan Basin project in Kalimantan. The Tarakan Basin is amongst the oldest oil producing centers in Indonesia with a proposed PSC area of 500 square kilometres. A preliminary study indicates 4-5 major continuous coal seams averaging 3-5 meters thick. Existing offtake infrastructure comprising oilfield and gas pipelines is in place.
Acquisition of IndonCBM
The Company is required to obtain shareholder approval for the Acquisition to satisfy various regulatory and statutory requirements. The shareholder meeting materials are presently under preparation and it is anticipated a General Meeting will be called as soon as possible in 2010. (End of release)