Pan Orient: Discussions with potential partners for Batu Gajah PSC on hold

By Romel S. Gurky

Canadian firm Pan Orient Energy Corp said that discussions with a number of parties interested to farm into the Batu Gajah PSC, on shore Sumatra, has been put on hold pending further information regarding a decision by the government of Indonesia to grant an extension to the PSC.

Pan Orient has been in talks with a number of potential partners since December of 2015 as the company prepares for additional appraisal well of the Akeh discovery. This portal reported last year, quoting a source, that three companies including Arztic Bay Ventire, ASX-listed Santos Ltd, and ASX-listed Lion Energy Ltd had expressed interest in the Batu Gajah PSC.

?The company is preparing to drill the Akeh-2 appraisal well in the fourth quarter of 2016 and is working through the process with the government of Indonesia related to the application for extension of the exploration period for the Batu Gajah PSC,? Pan Orient said in a statement Thursday.

The Batu Gajah PSC 10 year exploration phase expires in January of 2017 and the Company submitted an application in July 2016 to request an additional exploration period to allow the time required to finish drilling and analysis of the Akeh-2 appraisal well, apply for "Release from Exploration Status" and move forward to prepare a Plan of Development to determine the likelihood of the commerciality of the Akeh-1 discovery. The Government of Indonesia will determine at their discretion if an extension is to be granted, and the length of any extension which may be granted.

Pan Orient holds a 77 percent interest in Batu Gajah PSC as the operator.

Elsewhere, Pan Orient said in the statement that it looks forward to the planned drilling of the first East Jabung exploration well at the Anggun prospect in the fourth quarter of 2016. The Anggun prospect is a relatively shallow, onshore, potentially high impact target adjacent to existing infrastructure and possesses some of the best fiscal terms in Indonesia. Success at Anggun would have the potential to materially transform Pan Orient within a framework of manageable appraisal and development costs and in the context of Pan Orient's available financial resources.

Pan Orient, which holds a 49 percent interest in the East Jabung PSC.

Editing by Reiner Simanjuntak