Pant Orient updates Indonesian ops
Friday, May 27 2011 - 05:01 AM WIB
At the Batu Gajah Production Sharing Contract ("PSC") on-shore Sumatra (Pan Orient 97% working interest and operator), Pan Orient completed a transaction which increased our interest from 90% to 97% through repurchasing a 7% carried interest.
Late in March 2011, Pan Orient commenced the three well exploration drilling program at Batu Gajah with the spudding of the Tuba Obi Utara-1 (NTO-1) exploration well. The NTO-1 well encountered 10.5 feet of gas pay within good-quality sand near the top of the Lower Talang Akar formation ("LTAF"). The follow-up NTO-1ST side track well encountered the same gas sand formation identified at the NTO-1 well.
Initial drilling results at North Tuba Obi are encouraging with proven gas in the LTAF and additional hydrocarbon potential in the overlying formations existing eastward towards the crest of the Tuba Obi structure. Further appraisal drilling will be required to determine the commerciality and size of this accumulation. Plans are underway to seek Government of Indonesia approval for the drilling of three additional Phase Two exploration wells at Batu Gajah in late 2011 (bringing the total wells at Batu Gajah in 2011 to six plus the NTO-1ST side track), including the Tuba Obi Utara-2 (NTO-2) exploration well to be located approximately 5.7 kilometers east of the NTO-1 well. Capital expenditures of $4.9 million in the first quarter of 2011 at the Batu Gajah PSC included building of three drilling locations, equipment inventory for the three well drilling program, initial drilling costs for the NTO-1 well and exploration operations.
At the Citarum PSC on-shore Java (Pan Orient 77% working interest and operator), Pan Orient completed a transaction which increased our interest from 69% to 77% through repurchasing an 8% carried interest. Preparation for drilling is proceeding at the Citarum PSC with land purchase and the building of drilling locations towards an anticipated commencement of drilling of the first of three back to back wells in late September 2011. Capital expenditures of $0.5 million in the first quarter of 2011 at the Citarum PSC included initial costs for building of drilling locations and exploration operations.
At the South CPP PSC, on-shore Sumatra, Pan Orient completed a transaction which increased our interest from 90% to 97% through repurchasing a 7% carried interest.
The cost to repurchase carried interests in the three PSC's was $1.8 million, including the issuance of 50,677 shares in Pan Orient at a deemed market value of $0.3 million.
Subsequent to March 31, 2011, Pan Orient was notified that it was the successful bidder on a 100% working interest basis for the 6,228 square kilometer East Jabung PSC located on and offshore south Sumatra Indonesia. East Jabung PSC is directly east and adjacent to the company's 97% working interest and operated Batu Gajah PSC. (end of excerpt)