Salamander reports Indonesian ops update
Wednesday, March 25 2009 - 02:21 PM WIB
North Sumatra
Glagah Kambuna TAC (Salamander operator, 50% interest)
The Group now holds a 50% working interest and operatorship of the Glagah-Kambuna TAC, containing the Kambuna gas condensate field.
The Kambuna gas field development is progressing well with first production expected at the mid year 2009 and a rapid ramp up to the full daily contracted quantity of 40 MMscfd. Development drilling has been completed and the three wells on the structure tested at a combined rate in excess of 100 Mscfd and 8,000 barrels of condensate per day. Gas sales agreements have been finalised for the sale of 40 MMscfd of gas at an average price of $5.90 per Mscf (plus a 3% annual inflator).
The multi-phase pipeline from the field to the processing facilities onshore at Pangkalan Branden has been completed. The topsides for the offshore production platform were installed in March 2009 and work is ongoing to complete the onshore receiving facilities.
The Seruway PSC, off the northeast coast of North Sumatra, which was acquired as part of the GFI acquisition, was subsequently relinquished by the Group in December 2008. One well, Gurame-1Xwas drilled in 2008 to appraise a structure thought to contain multiple gas bearing sands. Hydrocarbons were observed in the target reservoir sandstones which unfortunately displayed low permeability characteristics. The Group decided to relinquish the acreage in order to focus its resources in areas of its portfolio considered to have considerably greater prospectivity.
Offshore North West Java / South East Sumatra
Production from the Offshore North West Java PSC was in-line with expectations and gas sales to the Pupak Kujang fertiliser plant began in February 2008. An 11 well infill drilling programme was completed with results generally exceeding the pre-drill expectations.
Production from the South East Sumatra PSC exceeded expectations as a result of an extensive workover campaign that slowed the forecast decline rate of the producing fields. The operator, CNOOC, continued an infill drilling programme throughout the year to help maintain production levels. The successful Mila-3 appraisal well gave support to the development potential of the Mila gas reservoir.
The Offshore North West Java and South East Sumatra PSCs continue to provide solid and reliable production of circa 6,000 boepd net to the Group.
East Kalimantan
In 2008, the Group continued to develop its acreage position in East Kalimantan by adding interests in three licences. Two of these, the Kutai PSC and the South East Sangatta PSC, are located in the Kutei basin; the Bengara-1 PSC, is located in the Tarakan basin. The Kutei basin is one of the most prolific in Indonesia and the Group now has the leading independent exploration acreage position in this basin.
Bontang PSC (Salamander operator, 90% interest)
In the operated Bontang PSC, the Group drilled two wells to appraise the Tutung gas discovery. The Tutung Alpha-1 well was completed in February 2008 and penetrated multiple hydrocarbon bearing sandstones. In July, a drill stem testing programme was completed across two zones in the Middle Miocene Pulubalang formation sandstones. The main zone flowed at 14 MMscfd and 475 barrels of condensate per day with rates constrained by the testing equipment available.
The Tutung Alpha-2 well was drilled as a long step-out from the Tutung Alpha-1 location, to test the limit of the closure to the northeast of the structure. Encountering the target formation low to prognosis, the well was sidetracked to a more crestal location where the main reservoir sands were absent. The results of the Tutung Alpha-2 well highlighted the potential for a stratigraphic trapping component in Tutung. This is also supported by pressure data from Tutung Alpha-1 that indicates a greater hydrocarbon column than can be supported by the closure mapped on the structure. Both wells have been suspended whilst evaluation work is undertaken to determine the next step in the appraisal process of this discovery. Options exist for further drilling or for a potential mini-development to further evaluate the reserves potential with gas production serving the local market.
A marine 3D seismic survey has been recorded in the offshore exploration fairway of the Bontang PSC. The results of this survey have been used to refine the leads and prospects on the block. The Angklung prospect has been identified as the probable first drilling target and a further 3D marine seismic survey was obtained over Angklung and nearby prospects early in 2009. This 2009 seismic was an expansion to the 2008 3D survey to high grade prospects ahead of a drilling programme in 2010.
The Group acquired a 23.4% interest in the Kutai PSC in July 2008 from partner Serica Energy. This was part of the asset package acquisition through which the Group gained an additional 15% interest in the Glagah-Kambuna TAC. The Kutai PSC is located in the heart of the Kutei basin in acreage surrounding a number of giant producing fields. The operator completed a 3D seismic survey in H2 2008 and started a 2D survey in early 2009. The results of these surveys will determine drilling targets ahead of a multi-well exploration programme in 2009/2010.
Also in the Kutei basin, the Group and its partners were awarded a licence for the South East Sangatta PSC in the 2008 Indonesian licensing round. The Group has a 49% interest and is operator with an option to increase this to 75%. The proposed work programme includes the acquisition of a 300 sq km marine 3D seismic programme and the drilling of one exploration well. It is expected that the block will contain a similar range of leads and prospects to those found in the adjacent Bontang PSC.
Simenggaris block (Salamander 21%interest)
In the Tarakan basin of northeast Kalimantan, the application for a plan of development for the South Sembakung field in the Simenggaris JOB-PSC was approved by the Indonesian authorities in August 2008. In the adjoining Bengara-1 PSC, preparations are well advanced for drilling the South Sebuku-1 well. Road construction and site clearance activities commenced in Q4 2008 and the well is expected to spud in June 2009. South Sebuku is a 30 MMbo prospect located updip and 7km to the north of the producing Sembakung field. (end of excerpt)