Premier Oil reports increased Indonesian production

UK independent oil, gas firm Premier Oil Plc. reported Thursday that during the first half of 2004, production from the Anoa oil and gas field, in block Natuna block A PSC, which forms part of the large West Natuna gas project in Indonesia, averaged 8,900 boepd ? up from 8,100 boepd in the first half of 2003, while production from the Kakap field in Kakap PSC, also in Natuna, amounted to 4,200 boepd, making total average production net to Premier of 13,100 boepd in the period.

Premier said demand from gas buyers in Singapore reached record levels in the first half of 2004 resulting in average production from the Anoa Gas Export platform of 143 MMCFD. Oil production in the first half of 2004 averaged 3,300 boepd compared with 3,700 boepd in 2003 reflecting the continued gradual depletion of the Anoa oil reserves.

As part of the Anoa field development plan for the West Natuna gas project, front-end engineering and design work was completed for the installation of a wellhead tower to access the gas reserves in the West Lobe area of the Anoa reservoir. Detailed engineering work will commence in the second half of 2004 and the project is scheduled to be completed in 2006.

Preparation for a production drilling workover programme on the Anoa Gas Export platform was undertaken in the first half of 2004. The programme consists of drilling three or possibly four production wells using a tender assist drilling rig. Drilling has commenced in August and is scheduled to last for up to two months.

The company said in 2004 West Natuna block A Anoa field has moved in 2004 from a cost recovery to a profit oil/gas position for the first time ? a year earlier than expected. ?Whilst this is positive in that it represents early pay-back on our investment and enables tax efficient future investment in the block, it also accelerates the reduction in Premier?s share of entitlement production and therefore reduces turnover and post tax profits from this asset,? said the company in a statement.

The company reported further that exploration activity in block A has continued with second second exploration and appraisal well will be drilled in the Gajah Baru area in the third quarter of 2004 to further assess the extent of the gas reserves in this reservoir discovered in 2000. In July a survey to acquire almost 700km of 2D seismic in the Kancil area, south of the Kakap block and within block A, was undertaken to help better assess the exploration potential of this area.

Premier Oil holds a 28.7 percent interest and operatorship in Natuna Block A, while the other participants, Kufpec of Kuwait, Amerada Hess, and Malaysia?s Petronas hold 33.3 percent, 23 percent, and 15 percent respectively. In Star Eenergy-operated Kakap PSC, Premier has 18.75 percent working interest.

Both Block A and Kakap PSCs are exporting natural gas to Singapore through 654- kilometer long West Natuna Transportation System (WNTS). (alex)