Production of Lemang block seen to peak at 57,000 bopd

By Ruli Setiawan

A high-case scenario, according to an independent evaluation, foresees oil production from the Lemang block to peak at 57,000 bopd, and gas output at 101 mmscfd.

SGX-listed Ramba Energy Ltd, which holds a 51 percent interest in the Lemang block, on shore Sumatra, announced Sunday the results of an independent evaluation of the group?s oil and gas assets by RISC Operations Pty Ltd. The RISC evaluation reviews the technical and commercial potential of Ramba?s Western Indonesia asset portfolio, namely the Jatirarangon block, the Lemang block and the West Jambi block.

For the Lemang block, the RISC evaluation reviews the development concept for the block?s Selong and Akatara structures, the locations of the group?s oil and gas discoveries, Ramba Energy said in a statement.

The evaluation projects peak production of 57,000 barrels of oil per day (bopd) and 101 million standard cubic feet of natural gas per day (mmscfd) for the high-case scenario (P10), 25,000 bopd and 47 mmscfd for the mid-case scenario (P50), and 11,000 bopd and 26 mmscfd for the low-case scenario (P90), the statement explained.

The evaluation projects total gross capital expenditures of approximately US$45 million for the low-case scenario (P90), $131 million for the mid-case scenario (P50), and US$263 million for the high-case scenario (P10), with approximately US$10-20 million in annual operating expenditures, which includes the rental of early production facilities.

SKK Migas, Indonesia's oil and gas upstream regulator, has halted all exploration activity for the Lemang Block and instructed Ramba Energy to work on hydrocarbon production as soon as possible, the company said.

?Based on the current schedule, first hydrocarbon production is expected sometime in the second half of 2015 or early 2016,? it said.

?This independent evaluation further upholds Ramba?s longstanding belief in the technical and commercial strength of our oil and gas team and assets. Lemang is our crown jewel and a top priority, so we will be aiming to start production ahead of schedule. These discoveries are only one of many prospects so we are confident there is more oil and gas within the Lemang block. In addition to this, we are exceptionally enthusiastic about our West Jambi prospects and look forward to proving up those leads and prospects later this year,? said Tan Chong Huat, Chairman of Ramba Energy.

The completion of the RISC evaluation comes following Ramba?s February 2014 announcement stating that the Government of Indonesia has mandated that the group immediately transition its work program from exploration to the Plan of Development (POD) for the Lemang block for the commencement of commercial production.

Editing by Reiner Simanjuntak