Pant Orient updates Indonesian ops
Thursday, August 18 2011 - 01:55 AM WIB
In the first quarter of 2011 Pan Orient repurchased carried interests in the Batu Gajah, Citarum and South CPP PSC's for $1.8 million, including the issuance of 50,677 shares in Pan Orient at a deemed market value of $0.3 million. After these transactions, Pan Orient has a 97% interest and is the operator at the Batu Gajah PSC, a 77% interest and is the operator at the Citarum PSC, and 97% interest and is the operator at the South CPP PSC.
At the Batu Gajah PSC on-shore Sumatra (Pan Orient operator and 97% ownership), Pan Orient commenced the exploration drilling program in late March 2011.
The Tuba Obi Utara-1 (NTO-1) exploration 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.
The SE Tiung-1 exploration well encountered oil shows and good quality sands within the primary Lower Talang Akar target horizon but wire line logging indicated the zone to be water bearing. The secondary objective of the Gumai and Upper Talang Akar formation sands were also present, but interpreted as being water bearing. The well is currently being plugged and abandoned. The results at SE Tiung-1 have no bearing whatsoever on the prospectivity of the upcoming three well program and we remain confident in the overall hydrocarbon potential of the Batu Gajah PSC.
There was repeated rig down time, rig repairs and resultant delays experienced during the drilling of Tuba Obi Utara-1 and SE Tiung-1 exploration wells. The decision has been made to release this drilling rig and defer the drilling of Betano-1 exploration well for cost and safety considerations.
Final location approval has been received for three additional wells planned for the Batu Gajah PSC (Tuba Obi Utara-2, Kemala-1 and Shinta-1) later in 2011 and final AFE approval is anticipated shortly. The Company is currently focused on accelerating the commencement of the drilling of these additional wells (two exploration wells and one appraisal well) with drilling to commence perhaps as early as October 2011.
At the Citarum PSC on-shore Java (Pan Orient operator and 77% ownership), land purchase has been finalized on two of three locations, contracts for a drilling rig and location construction have been awarded, site construction has been completed at Jatayu-1 and final acceptance of the three drilling locations is expected to be delayed from September 15, 2011 until October, 2011 due to the rerouting of location access at Cataka-1. Drilling of the first well is anticipated to commence in approximately the same October 2011 time frame as in Batu Gajah PSC.
It is expected that the East Jabung PSC will be formally granted to Pan Orient in September 2011. The 6,228 square kilometer East Jabung PSC is located on and offshore south Sumatra Indonesia, and directly east and adjacent to the company's 97% working interest and operated Batu Gajah PSC. The initial bonus and firm three year exploration commitment (including two wells and seismic) for the East Jabung PSC total $9.2 million. (end of excerpt)