Pan Orient to soon drill exploration well at Batu Gajah PSC

By Romel S. Gurky

TSX-listed Pan Orient Energy Corp. said it plans to drill an exploration well at the Batu Gajah PSC, onshore Sumatra, in the second half of 2015 for approximately US$6.5 million which would offset the Selong-1 oil discovery made by another operator in the adjacent Lemang PSC.

The company's view based on seismic interpretation is that the Selong oil discovery drilled approximately 175 meters from the PSC boundary extends into Pan Orient's adjacent Batu Gajah PSC acreage.

Pan Orient said in a statement Thursday that it has selected three drilling locations which have been submitted for the required Forestry Ministry approval which is anticipated in early June 2015.

Elsewhere, the company said it is currently awaiting Government of Indonesia approval of the change in participating interest and change of operator in the East Jabung PSC, onshore Jambi, as a result of the farmout agreement signed between the company and a subsidiary of Talisman Energy in November of last year.

?We have been in regular dialogue with both Talisman and the Indonesian Government regarding this matter and expect the approvals to be received in June 2015 due to some minor delays experienced as a result of the recent Indonesian elections,? Pan Orient said.

?The first well is currently planned to be drilled in the East Jabung PSC in approximately early to mid-2016,? the company said.

Pan Orient said capital expenditures in Indonesia were $6.6 million during 2014. There have been capital expenditures of $5.4 million at the East Jabung PSC principally related to completing the 440 kilometer 2D seismic program, preparation for the Anggun #1 exploration well and capitalized general and administrative expenses, $1.1 million at the Batu Gajah PSC associated with completion of the 400 square kilometer 3D seismic program and capitalized general and administrative expenses, and $0.1 million for equipment inventory.

Editing by Reiner Simanjuntak