Peak completes seismic acquisition program at SBA PSC

By Romel S. Gurky

ASX-listed Peak Oil and Gas, through its majority controlled Renco Elang Energy Pte Ltd (REE), said together with seismic contractor, Quest Geophysical Company, and with the assistance of its Joint Venture Partner KRX (a wholly owned subsidiary of Lion Energy Ltd), completed seismic recording operations early in the second quarter of this year in South Block A (SBA) PSC, acquiring 183 km of 2D seismic.

?During the survey an extra three lines were acquired over the shallow Paya Bili lead due to positive results from the initial seismic. In completing the seismic survey we logged around 1.2 million man hours incurring only one, relatively minor, Lost Time Injury (LTI).Data on field and brute stacks are of good quality and processing is nearing completion,? Peak said in a statement Thursday.

REE is the operator of the SBA PSC with a 51 percent working interest (Peak earning net 38.25 percent).

Drilling prospects will be matured following receipt of final processed data, with a drilling location to be selected in the near term to target an attractive shallow oil prospect for drilling, to be followed by a deeper, wet gas, drill target, the company added. ?Early well planning is underway and an operational schedule will be finalized in the near future.?

Peak said that during seismic line clearing operations over the Simpang lead, high quality, live oil was sampled from shallow wells, hand drilled by locals and producing around 100L (3-4 Jerry Cans) per day. A similar occurrence was also encountered at Alur Sentang, to the north of the Paya-Bili lead. Samples of the oil being produced were obtained and analyzed indicating very high quality oil.

The Simpang oil sample is described as low viscosity, brownish black liquid, smelling like a mixture of diesel and petrol. The gas chromatography (GC) profile is characterized by suites of normal paraffin?s ranging from nC5 to nC25+. There is a relatively low abundance of waxy components (>nC25) and no evidence of biodegradation. The GC fingerprint profile is consistent with the existence of light oil, confirmed by analysis as a 50? API light, high quality oil. These shallow oil shows validate the presence of a very active petroleum system in the immediate locality, close to SBA Leads, and supports the oil potential in the block.

Peak said that SBA is prospective for both oil and gas exploration with both commodities in strong demand within Sumatra. A new gas pipeline is under construction between Arun and Medan, the largest city in Sumatra and the fourth largest city in Indonesia. The pipeline passes through SBA(above map) and is reported to have a capacity of 400 MMSCF per day and will transport gas from the Arun gas facilities (including an LNG receival terminal currently being built).

?Peak understands it will be an open access pipeline with around 200 MMSCFD forecast spare capacity. The pipeline is located close to key prospects within the SBA permit, it represents a potentially attractive gas transportation option and could assist in commercializing any gas discovery Peak should make through its drilling program,? the company said.

The successfully acquired seismic data was located to mature and prioritize five oil and gas leads to prospect status, one of which will be selected for drilling later in the year.

As previously reported, the five oil and gas leads, on an aggregate basis, result in an Unrisked P50 Prospective Resource estimate1 of 439 BCF of gas and 47 MMBBLS of oil and condensate. The largest of the gas leads has been mapped to have the potential to contain an Unrisked P50 Prospective Resource1 of 285 BCF recoverable gas and 16 MMBBLS condensate. ?The shallow oil leads targeted have P50 Prospective Resources1ranging in size from 4 to 8 MMBBLS and represent attractive near term commercialization opportunities,? Peak said.

Located in a highly regarded area of the prolific North Sumatra Basin, in close proximity to established pipelines and facilities, containing proven hydrocarbons with gas and oil flows from old wells and scheduled for new drilling, SBA is maturing as a new value proposition for the company.

The new phase of exploration is targeting overlooked high quality, shallow oil and large scale wet gas, underpinned by growing energy demand leading to attractive gas prices in the rapidly expanding economy of the region.

?The successful completion of the SBA Seismic Survey, contemporaneously with the presence of oil in hand drilled shallow wells on the flank of one our major leads, is highly positive for the potential of the planned drilling of an attractive shallow oil target.? Peak said.

The construction of new gas pipeline infrastructure through SBA provides a new incentive to gas exploration in the block as a potential contribution to the increasing energy demand required to underpin the continuation of strong economic growth in the province. Peak said it is excited by the potential for material gas-condensate discoveries in the block to help meet the region?s growing gas demand. ?We anticipate the completed seismic program will also mature an attractive gas-condensate prospect for drilling in 2015,? the statement ended.

Editing by Reiner Simanjuntak