Pan Orient: Two additional exploration wells to be drilled in East Jabung PSC

By Romel S. Gurky

Canadian firm Pan Orient Energy Corp said the East Jabung PSC, onshore Jambi Province, has a firm well commitment of two exploration wells to be drilled prior to the expiry of the first six-year exploration phase November 21, 2017 (excluding any extension that may be granted).

The AYU-1X exploration well is the first commitment well. ?Pan Orient and the operator will determine the extent and timing of further exploration activity based on the results of the AYU-1X well, expected costs, required timing and Government of Indonesia approvals,? the company said in a statement on Thursday.

The company said that the AYU-1X exploration well is anticipated to reach total depth at approximately the end of August. The results of the AYU-1X exploration well will have a significant impact on Pan Orient's future strategy.

Pan Orient said at the East Jabung PSC, the AYU-1X exploration well at the Anggun prospect is drilling pursuant to the terms of the 2015 farm-out agreement whereby the farminee funds the first US$10 million towards the first exploration well and a contingent commitment to fund the first $5 million towards an appraisal well, if justified.

The total estimated dry hole cost of the AYU-1X well for location and access, drilling to total depth and post total depth evaluation is estimated at $12.6 million, with $1.2 million net to Pan Orient. If warranted, testing of the AYU-1X well is expected to take an additional 16 days with an estimated cost of $2.1 million, with $1.0 million net to Pan Orient.

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

Editing by Reiner Simanjuntak