Salamander reports Indonesian 2007 operation results
Friday, March 28 2008 - 01:12 AM WIB
Salamander?s operations in Indonesia are located in East Kalimantan, Offshore North West Java and South East Sumatra and, following the acquisition of GFI, Offshore North Sumatra.
East Kalimantan
Salamander began 2007 with its operated Bontang PSC in the prolific Kutei basin as its only acreage holding in East Kalimantan. The Company has now expanded its presence to include stakes in the Simenggaris PSC and the Bengara-1 PSC in the Tarakan basin. In addition, the Company farmed in to Block SC41 in the Sandakan Basin. Although this block lies in Philippine waters it shares its geological setting with the basins of East Kalimantan.
In the Bontang PSC, Salamander acquired a 170km 2D transition zone seismic survey over the Tutung gas/condensate discovery and a 450 sq km 3D seismic survey over the offshore portion of the Bontang PSC. The results of the transition zone survey were used to locate the Tutung Alpha-1 appraisal well that spudded on 9 January 2008. The well was completed in February and penetrated multiple hydrocarbon bearing sandstones in the Middle Miocene primary objective. Extensive wireline logging confirmed that mobile gas and condensate are present and Salamander is sufficiently encouraged to bring back the Ensco-1 barge mounted rig to drill the Tutung Alpha-2 appraisal well in the second quarter of 2008. A testing spread will also be mobilised.
The offshore 3D seismic survey in the Bontang PSC completed in late 2007 was the first data acquisition in this part of the Kutei Basin since the early 1980?s. The results of the survey are now being interpreted in-house and the data quality is very good. This is enabling Salamander?s technical team to complete the evaluation and prospect definition ahead of a drilling programme in the second half of 2008. Available rigs have been identified.
The Tarakan basin has long been identified as a strategic target area for the Company and Salamander completed the acquisition of a 21% interest in the Simenggaris PSC in the second quarter of 2007. In late 2007 the Simenggaris joint venture partners appraised the South Sembakung gas-condensate discovery with two wells. Both of these wells flowed gas with South Sembakung-2 testing at a cumulative rate of 12.7 MMscfd. The wells were suspended as potential future producers. A plan of development for South Sembakung was submitted to the Government of Indonesia in February 2008 and it is now under review by BPMigas. Under the plan of development, South Sembakung gas would be sold at the wellhead and then piped to Medco?s Bunyu Island Methanol plant some 55 km away. Gas pricing discussions have yet to take place. Production start up is envisaged in 2010 with total sales over the field life estimated at circa 100 Bcf.
Extending its presence further in the Tarakan basin, Salamander announced in January 2008 that it had acquired a 25% interest in the Bengara-1 PSC. This block is immediately adjacent to the Simenggaris block with which it shares the Sebuku prospect. The Sebuku prospect is estimated by the operator Medco to have resource potential of 29 mmbo and 14 Bcf of gas and the South Sebuku-1 exploration well will be drilled in the second half of 2008.
Offshore North West Java/South East Sumatra
In Offshore North West Java and South East Sumatra production continued at predicted rates. A new Gas Sales Agreement in ONWJ to sell gas to the Pupuk Kujang fertiliser plant was expected on stream in late 2007 but encountered delays and sales did not commence until February 2008. However, over production on existing gas contracts made up the shortfall. The operator, BP, has committed to a programme of infill drilling in ONWJ that will see up to 10 wells drilled in 2008. In SES the phase 2 gas development commenced production in August 2007 generating an extra 71 Mscfd of sales. The Banuwati gas field was also connected up to the Widuri oil production facilities providing fuel gas and so freeing up 1,200 bopd of oil for sale that had previously been used for power generation.
3D seismic was acquired in SES in the first half of the year to cover the three oil discoveries, Taskia, Manik and Delima that were made in 2005/06. Operator CNOOC drilled two appraisal wells on the Manik discovery during the period which found the reservoir but no hydrocarbons. The operator has recently completed a review of the data and is now mobilising the Bohai IV jack up rig to drill the Nirmala 1 exploration well.
North Sumatra
Through the acquisition of GFI, Salamander has added two high quality holdings to its Indonesian portfolio.
The Glagah-Kambuna Technical Assistance Contract lies offshore North Sumatra and contains the Kambuna gas condensate discovery which is currently subject to development drilling and is expected to start production in the first half of 2009. The Kambuna jacket has already been installed and development drilling of two new wells and the recompletion of one existing well are underway. It is intended that the production will be piped to shore for sale into the local market. The nearby Glagah oil discovery, which produced over 2,000 bopd on test in 1985 will be the subject of further review to see if a development can be established exploiting the Kambuna infrastructure.
The Seruway PSC comprises offshore and transition zone acreage in a large block off the northeast coast of North Sumatra. In March 2008 the Ensco-1 barge mounted rig spudded the Gurame-1X well on a very large structural high. Previous drilling of the structure in the 1960?s resulted in the discovery of multiple gas sands. The Gurame-1X well will appraise the commercial potential of the feature in a region where gas prices have risen to in excess of $5.00 per Mscf. The Seruway block also contains numerous other prospective features. Following the drilling of Gurame 1X the rig will return to Bontang for the Tutung Alpha-2 well. (end of excerpt)