Salamander updates Indonesian ops
Thursday, March 24 2011 - 10:53 AM WIB
Production and Development
Kambuna Gas and Condensate Field, Glagah-Kambuna TAC (50%, Operator)
Gross production from the field averaged 9,200 boepd during 2010. This was comprised of 31 MMscfd of gas and 2,700 barrels of condensate per day. Production during 1Q 2010 was at temporarily reduced levels as a result of production being shut in. This was initially due to the buyer (PLN) bringing one of its gas turbines at the Belawan power plant on line, and then due to the gas transporter (PGN) completing maintenance on the pipeline delivering Kambuna gas to the power plant. From May 2010 onwards, once these downstream issues were resolved, the field reliably produced at or above the daily contracted quantity ("DCQ") volume of 40 MMscfd and 3,500 barrels of condensate per day.
In October 2010 the Group completed the construction of the permanent onshore receiving facilities at Pangkalan Brandan. This enabled the Group to release the rented facilities that it had been using. As a result the commissioning of the permanent facilities will considerably reduce the operating costs associated with the Kambuna field.
In August 2010 the Group announced a revision to its reserve estimate for the Kambuna field. It reduced its net entitlement proven and probable reserves by 1.8 MMboe (7.5 MMboe on a net working interest basis) as a result of observing a faster than anticipated pressure decline in the Kambuna-3 well. Since then the pressure decline has continued, although there are indications of some pressure support from outside the high quality reservoir area, and this gas influx may contribute further to recoverable reserves. We continue to monitor this situation closely and manage the reservoir to maximise recovery of both reserves and data. In order to sustain the productive capacity of the field the installation of compression facilities has been brought forward to 2011.
Offshore Northwest Java PSC ('ONWJ')/ Southeast Sumatra PSC ('SES') (5% in both)
Production from ONWJ exceeded expectations averaging 64 Mboepd whilst production from SES was in line with expectations averaging 59 Mboepd. Extensive infill drilling continued across both of these licences throughout the year. The new operator of ONWJ, Pertamina, continues to pursue a more active programme to add reserves and arrest production decline. Oil production rates from ONWJ are now back to a level not seen since 2004.
Kerendan Field Development, Bangkanai PSC (69%, Operator)
The Group completed the acquisition of a 69% operated interest in the Bangkanai PSC during 2010, which contains the Kerendan gas field development and surrounding exploration acreage. The Kerendan gas field was discovered by Unocal in 1982 and flowed 15.5 MMscfd gas and 330 bpd of condensate on a long term test from the Kerendan-1 well but was not progressed at that time due to the then limited gas market opportunities.
A plan of development for the Kerendan field was approved by BP Migas in July 2006. The Group is currently finalising the negotiation of a Gas Sales Agreement for 20 MMscfd over 20 years. Start of production is targeted in 2014. The gas will supply a new build 120 MW power plant located close to the field, which will be connected by transmission lines to the rest of the Kalimantan electricity grid.
South Sembakung Development, Simenggaris PSC (21.5%)
The development of the South Sembakung gas field continues with three development wells planned in 1H 2011. Construction of the gas processing facilities commenced in 2010 and will continue during 2011. First gas production is anticipated during 1H 2012 at volumes of c. 25 MMscfd. The Gas Sales Agreement is at a price of $3.00 per Mscf plus an inflator linked to prevailing methanol prices and will see the gas piped to the nearby Bunyu Island Methanol Plant. Further seismic acquisition over the field area and on surrounding exploration discoveries and prospects is underway.
Exploration and Appraisal
Bontang PSC (100%, Operator)
The Angklung-1 well was drilled in November 2010 in the offshore portion of the licence area. It encountered approximately 23 metres of net gas pay in a high quality Lower Pliocene sandstone. Test analyses confirm that the reservoir has high porosity and permeability. The well flowed at a rate of 24 MMscfd from a ten metre interval. The flow rate was constrained by surface equipment and it has been calculated that it would have flowed at approximately 50 MMscfd without these constraints. It is a sweet gas with no indication of H2S or CO2.
The gas bearing Pliocene sandstone correlates with strong amplitude anomalies on the 3D seismic data implying that this distinctive seismic signature indicates the location of gas-charged sandstones. Initial interpretation of the results of the Angklung-1 well implies mean resources of 290 Bcf in the Pliocene sands over the Angklung structure. Applying this seismic calibration to the Kecapi and Bedug prospects, which are adjacent to Angklung and in the same channel sand complex, gives potential mean resources of 209 Bcf and 344 Bcf respectively. There are additional channel features elsewhere on the block containing a number of other prospects and the Group is continuing its technical work to further evaluate the potential of the Pliocene sandstone gas play across its full prospect inventory in the Bontang PSC.
In addition to the gas discovery in the Pliocene sandstone, the Angklung-1 well encountered a gross 256 metre section of interbedded sandstones and shales in the deeper, Upper Miocene section. This was interpreted to contain a net 120 metres of oil bearing sandstones which have low permeability and are not considered to be net pay at this location. The presence of such a thickness of sandstone in the Upper Miocene has not been seen in previous wells on the acreage and the Group is currently analysing the depositional setting and distribution of the Miocene sandstones to aid it in identifying this oil play fairway.
The Group plans to drill a follow up to the Angklung-1 well in 4Q 2011 and will be looking to select a location where it can both appraise the Pliocene gas play and explore for the Miocene oil play.
On the Tutung gas-condensate discovery, the Group has completed preparations for the Tutung Alpha-3 appraisal well that is scheduled to be drilled in 2011. On successful completion of the Tutung Alpha-3 well a plan of development will be submitted to BP Migas.
Southeast Sangatta PSC (75%, Operator)
The Southeast Sangatta PSC is in the Kutei Basin immediately adjacent to the Bontang PSC. The Angklung discovery extends into the Southeast Sangatta block and the acreage contains a number of comparable leads on trend with Angklung. It also contains a separate Oligocene-Eocene play in the north of the licence. Both 2D and 3D seismic surveys were acquired in 1Q 2011 and will be used to locate a well in 4Q 2011 either to appraise the Angklung discovery or to explore one of the other prospects that the 3D data set is expected to define.
Glagah-Kambuna TAC (50%, Operator)
An exploration well on the North Kambuna prospect is planned for 3Q 2011. North Kambuna is a combination structural-stratigraphic trap at the level of the Belumai sandstone, the primary reservoir in the Kambuna Field. An underlying Lower Belumai sand may also be prospective in the North Kambuna structure. The North Kambuna prospect will be reached by a well drilled directionally from the Kambuna platform and in the event of success the well can be brought on stream immediately through the existing facilities.
Kutai PSC (23.4%)
The operator of the Kutai PSC drilled two exploration wells in 2010. The Dambus-1 well found excellent quality gas bearing sandstones in a stacked sequence of Miocene age. However it appears that some of the sandstones are juxtaposed and leak across the bounding fault so reducing the net pay. As a result the discovery was deemed to be sub-commercial. The Marindan-1 exploration well encountered thin hydrocarbon bearing sandstone and carbonate reservoirs but the operator deemed the volume of hydrocarbons to be insufficient to justify commercial development.
Further 3D seismic acquisition is planned in the vicinity of the Dambus discovery to fully define the follow up potential in the area.
Bengara I PSC (41.7%)
The South Sebuku-2 appraisal well is scheduled to spud in April 2011. South Sebuku is a gas discovery located 15 kilometres away from the South Sembakung field development. If the well is successful it is anticipated that a plan of development will be submitted in 2H 2011 that would see the discovery being tied to market through the South Sembakung facilities.(end of excerpt)