Pan Orient receives approval for drilling in Batu Gajah PSC

By Romel S. Gurky

TSX-listed Pan Orient Energy Corp. has received Government of Indonesia (GOI) approval for the drilling of the Akeh-2 in Batu Gajah PSC, onshore Sumatra deviated appraisal well from the existing Akeh-1 well pad to further delineate the Akeh prospect as required to apply for "Release from Exploration Status".

The firm said it is currently preparing for the drilling.

The Batu Gajah PSC 10 year exploration phase expires in January of 2017 and the company intends to submit an application for a two year extension in June 2016. A two year extension would allow the time required to finish drilling 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 GOI may require Pan Orient to have drilled the Akeh-2 well prior to granting an extension.

Pan Orient has also been involved in discussions with a number of parties since December 2015 seeking a partner in the Batu Gajah PSC.

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

Meanwhile, the operator has advised Pan Orient the first exploration well at the Anggun prospect in the East Jabung PSC is scheduled to be drilled in the fourth quarter of 2016. The Anggun prospect is a relatively shallow, onshore, 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.

The firm also said on Oct. 6, 2015 the Citarum PSC (onshore Java Indonesia in which Pan Orient was operator with a 97 percent interest) expired and US$0.5 million was recorded as an exploration expense in 2015.

Editing by Johannes Simbolon