Oyong, Wortel fields to switch to only gas operation in September 2017
Friday, September 23 2016 - 01:36 AM WIB
ASX-listed Cue Energy Resources Ltd said Thursday that as part of its strategy of delivering disciplined growth through attractive opportunities in Indonesia, and subject to final government approvals, the Sampang Joint Venture (Santos, with 45% interest as operator, Singapore Petroleum Company 40%, and Cue 15%) has approved the Sampang Sustainability Project (SSP) to extend the lifespan of the Oyong and Wortel fields in the Sampang PSC, East Java.
The company said in a statement that this initiative will involve switching the Oyong and Wortel Fields to a gas only production system and ceasing uneconomic oil production. Operator production forecasts based on implementation of the SSP show an increase of 2P reserves of ~17 billion cubic feet (bcf) associated with the extended life of the Wortel and Oyong fields.
Cue said the current project schedule estimates switching to gas only operations in September 2017 allowing both the Floating Production Storage Offloading vessel, Seagood, and the Floating Storage Offloading vessel, Surya Putra Jaya, to be decommissioned in the fourth quarter of 2017. This should reduce total annual production costs from circa US$50 million in 2016 to about US$22 million by 2018.
?The extension of low cost gas production from Sampang will provide Cue with continued, stable, positive non-oil linked cash flows which protect the Company from low oil prices,? the statement said.
The Sampang PSC is located in the Madura Straight offshore Madura Island in East Java. It is composed of two producing fields: Oyong oil and gas field and Wortel gas field. The Jeruk oil discovery is still to be developed.
Elsewhere, Cue said the existing reservoirs for the Oyong and Wortel Fields are in structural and structural/ stratigraphic trap closures in the Mundu Formation. The joint venture has reviewed other Mundu Formation prospects, including the Paus prospect, which is believed to be a low risk prospect and potentially a drilling candidate in 2018. The joint venture is yet to make a its decision to proceed with this near term exploration potential but if drilling is approved and is successful, Paus could be tied back through the Oyong facilities and further extend the gas production from the Sampang PSC for many years. Cue will keep the market informed of any developments.
Editing by Reiner Simanjuntak