Rift Basin to acquire data related to Dandangilo-Beji block

By Ruli Setiawan

TSX-listed Rift Basin Resources Corp. said it was proceeding to acquire and evaluate a substantial volume of legacy seismic, technical and geological data with respect to the Indonesian onshore multi-reservoir oil field known as the Dandangilo & Beji block, in East Java.

Rift Basin signed a memorandum of understanding (MoU) with Indonesian firm PT Sinergi Wijaya Kusumah in May of this year to redevelop the Dandangilo-Beji Block. Sinergi holds the rights to develop the block.

?This appraisal process will have the technical support of a technical team provided by an established intermediate oil and gas production company which will assist the company to evaluate the economic potential for secondary shallow-oil recovery, as well as the deeper target potential in the basin,? Rift Basin said in a statement obtained Tuesday.

The Dandangilo-Beji block has historic and current oil production. It is located in Bojonegoro, East Java, Indonesia, and contains 110 existing wells within an 80 sqm area, Rift Basin said. According to data on file at the University of Pembangunan Nasional Veteran , Jakarta , original oil in place in the Field reservoir was 112 million stock tank barrels (MMSTB). Pertamina recorded production of approximately 20 MMSTB during the period 1963-1980 after which no commercial operations were undertaken.

The company is seeking to confirm the field's secondary recovery potential from more than 86 shallow wells after the application of relatively low cost well work-over techniques. In addition to the secondary recovery opportunity, the company will be seeking to determine the deeper target potential below the field's originally produced reservoirs.

Elsewhere in the same geologic basin, ExxonMobil is reported to have discovered a very substantial oil accumulation at the deeper Kujung horizon in its Cepu Block, approximately 15km to the south of the Field and initial reports suggest the Cepu field is expected to produce 165,000 barrels of oil per day when fully developed.

Also, PT Petrochina Indonesia is mobilizing approximately 15km to the northeast of the Field to drill a deep well in an attempt to penetrate the same Kujung formation as ExxonMobil penetrated.

?The MOU is not a definitive agreement and does not create obligations to the parties thereto other than giving Rift Basin the opportunity to negotiate and enter into a definitive agreement to establish oil and gas production for the Field. There can be no assurance that any transaction in connection with the MOU will be completed. Any definitive agreement will be subject to applicable regulatory approval,? Rift Basin said.

The company plans to raise funds via private placement to help finance the data acquisition, assessment, and due diligence related to the MoU.

Editing by Reiner Simanjuntak