Salamander reports Indonesian ops update
Thursday, August 27 2009 - 08:19 AM WIB
Operation
Glagah Kambuna TAC (Salamander operator, 50% interest)
The Kambuna gas-condensate development, offshore North Sumatra, has been completed and first gas was produced in August 2009 through early production facilities. As the facility is debottlenecked throughput will rise to reach the full contracted volume of 40 MMscfd. The gas sales have been contracted to Pertiwi and PLN for use in power generation in North Sumatra and will realise an average price of $5.90 per Mscf with a 3% annual inflator.
The focus of the Kambuna development project will now switch to the completion of the permanent onshore receiving facilities at Pangkalan Brandan. These are expected to be finished around the turn of the year and will have the capacity to handle additional volumes above and beyond the level of the current contracted volumes. With this in mind Salamander intends to advance discussions on marketing additional volumes of Kambuna gas as soon as the production history has demonstrated the capacity of the wells to deliver additional volumes on a sustainable basis.
ONWJ & SES (Salamander 5% interest each)
Production from the Offshore North West Java and South East Sumatra PSC's was in line with expectations. These licences continue to produce at a steady rate of c.6,000 boepd net to the Group. Infill development drilling programmes have been conducted on both blocks during the first half of 2009 to maintain the production, to look for new oil and to appraise previously discovered reserves.
Exploration
Bontang PSC (Salamander operator, 90% interest)
In East Kalimantan, the Group continued to mature its exploration acreage ahead of 2010 drilling. Additional 2D seismic was recorded over the Bontang PSC and the Angklung prospect has been selected as the first exploration drilling target on this block in 1Q 2010. Angklung is a fault bounded closure with sandstone reservoir targets in the Middle Miocene and is forecast to contain c.70 MMboe of prospective resources. Additional prospects, of similar resource potential, have been identified for drilling later in 2010 and in 2011.
The Group continues to evaluate the options for the Tutung discovery and is currently awaiting the results of seismic reprocessing and a local gas marketing study before deciding whether to pursue a mini-development or return for further appraisal work.
Kutai PSC (Salamander 23.4% interest)
A 2D seismic survey has been completed in the Kutai PSC. The operator expects to commence an exploration drilling with two onshore wells, and two contingent offshore wells, in 2010.
Simenggaris block (Salamander 21%interest)
Further north, in the Tarakan Basin, an auction process was conducted to find a buyer for gas from the South Sembakung field in the Simenggaris PSC. A consortium of PLN and Medco Gas won the bidding and heads of agreement have been signed for the supply of gas from the field to the nearby Bunyu Methanol plant. The base gas price will be $3 per Mscf escalating at 3% per annum with an uplift component relating to prevailing methanol prices. This price will sustain an economic development of the South Sembakung field and work on the field development itself is scheduled to commence by year end.
Bengara-1 PSC (Salamander 25% interest)
The South Sebuku-1 exploration well in the Bengara-1 PSC, also in the Tarakan basin, was spudded in June 2009 and encountered gas in four zones. Two of these were tested and flowed at a cumulative rate of 10.9 MMscfpd. Discussions are in progress with the Indonesian authorities to facilitate appraisal of the discovery. Assuming successful appraisal the South Sebuku gas discovery is expected to be tied in to the South Sembakung field, located only 15 km away. (end of edited release)