NuEnergy updates Indonesian CBM projects
Thursday, September 30 2010 - 09:30 AM WIB
Review of Operations
During the year the Company continued to progress the acquisition of Indon CBM Limited (Indon CBM) and establish itself with a focus on coal bed methane projects in Indonesia.
As previously reported, the Company contracted to acquire Indon CBM and its 95% owned Indonesian domestic entity PT Trisula CBM Energi (Trisula) in November 2007. Since this date. Indon CBM and Trisula have been awarded two well located Coal Bed Methane production sharing contracts (?PSC?s?) in Indonesia, being the South Sumatra CBM Project and the Rengat CBM Project.
The Company was required to obtain shareholder approval for the acquisition of Indon CBM to satisfy various regulatory and statutory requirements and this was completed on 25 August 2010.
Further, as announced on 1 June 2010, the Company is in the process of raising additional capital to fund the work programmes and various new venture areas under consideration. A prospectus was prepared and lodged on 13 August 2010 to facilitate the raising of $9 million in new capital. This offer will remain open until 8 October 2010 unless otherwise extended.
Indonesian Coal Bed Methane PSC?s
The Company?s key business activities now relate to two granted CBM production sharing contracts with the Indonesian government (PSCs) and it also has three other prospective CBM projects. The CBM Projects are located in Central Sumatra. South Sumatra and East Kalimantan, Indonesia as shown in the map below.
The Muara Enim Block, South Sumatra CBM Project
A PSC for this area was entered into on 30 November 2009 by and between BP Migas, Trisula and Pertamina, the Indonesian state owned oil company (Pertarniria). Trisula currently holds a 40% participating interest in the South Sumatra PSC.
Currently the company is planning the work programme and budget for both years one and two for this PSC. This programme will comprise of a coring and drilling campaign which will he commenced as soon as it is approved by the Joint Venture Partners and BP Migas, the Indonesian Government regulator for coal bed methane PSC?s.
This is expected to cost around $2-3 million.
The data acquired from this programme is targeted at establishing of a viable coal bed methane gas development is viable.
The Rengat Block, Central Sumatra CBM Project
A PSC for this area was entered into on 30 November 2009 by and between Indon CBM and BP Migas (Rengat Project or Rengat PSC). Indon CBM currently holds a 100% participating interest in the Rengat Project PSC.
As for the South Sumatra PSC, currently the company is planning the work programme and budget for both years one and two for this PSC. This programme will comprise of a coring and drilling campaign which will be commenced as soon as it is approved by the Joint Venture Partners and BP Migas, the Indonesian Government regulator for coal l)ed methane PSC?s.
This is expected to cost around $2-3 million.
The data acquired from this programme is targeted at establishing a viable coal bed methane gas development.
Other Prospective CBM Projects
The South Sumatra Overlapping Area Project
Following completion of the Joint Evaluation over this prospective area by Trisula, jointly with Pertamina, an application to enter into a PSC with BP Migas for the South Sumatra Overlapping Project is pending. Should all the mandatory, preliminary stages in respect of the awarding of the PSC he successfully completed, Trisula will, most likely, have an initial 30% participating interest in the South Sumatra Overlapping Area Project PSC.
The Bunyu Tarakan Basin Project in Kalimantan
The Joint Evaluation application intended to be made by Trisula, jointly with Pertamina being a mandatory preliminary stage in the awarding of a PSC with BP Migas is pending. On the basis that this application is made in cooperation with Pertamina and depending on the results of the Joint Evaluation and should all the mandatory, preliminary stages in respect of the awarding of the PSC he successfully completed, Trisula will, most likely, have a 40% participating interest in the Tarakan Project PSC; and
Bukit Asam Project in Central Sumatra
A Joint Evaluation is intended to be carried out in an area adjacent to the area of Indon CBMs existing Rengat PSC by Indon CBM and PT Bukit Asam (Persero) Tbk, a State Owned Company engaging in coal mining business activities. Under the relevant heads of agreement dated 30 April 2010, the parties have agreed to take steps towards entering into a CBM PSC with BP Migas. Depending on the results of the Joint Evaluation and should all the preliminary stages in respect of the awarding of a PSC be successfully completed. the distribution of participating interests in the PSC between the parties will. most likely, be indon CBM at 49% and Bukit Asam at. 51 %
CBM potential and geology in Indonesia
There are a number of studies on the CBM potential of Indonesia as set out in the Independent lechnical Specialists Report in the recently lodged prospectus.
Indonesia has vast coal basins which are well documented with CBM being a recently targeted resource. The CBM potential of Indonesia is considered to be in excess of 300 TCF of gas in place. There are numerous energy majors acquiring CBM acreage in Indonesia.
The areas of interest held by way of existing PSC?s are considered to be prospective for CBM production. However, whilst the existing preliminary data analysed in these areas suggests good potential for coal bed methane production potential. the exact nature and gas production potential will require further analysis and verification by the planned work program as described above. (end of excerpt)