Release: Kisaran PSC Block executive summary

The proposed Kisaran PSC Block is located just north of Caltex Pacific Indonesia operations area with the total size approximately 4354 sq. km.

Part of the area was previously included in the CPI Rokan Block and CandT Siak Block where around 16 exploratory wells had been drilled from the early 70s through the early 90s. Numerous non-economic oil and gas zones were encountered in the Perbaungan No.1, Barumun No.1, Merbau No.1 and Kayuara No.1 wells.

The fractured Pre-Tertiary basement reservoir, the deep Pematang reservoir quality, the hydrocarbon generation concept, the maturation and migration concept in the Barumun Basin, and the technology advancement of seismic resolution have led into a renewed CandT and CPI's interest in exploring the subject Kisaran Block.

The contract is structured such away to allow CandT to backaway any time after year 2 or spending $2.25 Million and $ 400,000 Signature Bonus for a total $2.65 million.

The total expenditure commitment after year 10 is $13.65 million using regular PSC arrangement for oil (15 percent) and gas (35 percent).

The Kisaran Block is considered as Low Commercial Risk and Moderate Geologic Risk conveniently located about 125 Km to the Batang Field.

Using 10% discount rate at 250 BCF P50 reserves with $2.29 per million cubic feet well head price and $16 million exploration appraisal expenditures indicate: NPV $ 86 million, DPI 3.9, ROR 55 percent.

The bid negotiation was started in late 1999.

Our 3-D seismic crew can be mobilized by August this year for possible early 2002 exploratory drilling.

This will lead to a probable gas production and delivery at 100 million cubic feet per day from the Kisaran Block by early 2006.

Field preparation is underway in order to meet the production forecast. (*)