Serica receives higher offer for N. Sumatra gas

LSE-listed oil, gas firm Serica Energy plc reported on Tuesday that it had received offer to buy gas from its proposed Kambuna field in Glagah Kambuna TAC, offshore North Sumatra at higher price than the first contract it had clinched.

?Following the agreement of terms for the sale of 28 mmscfd of gas to the state electricity firm PLN, at an initial price of US$4.50 per million Btu (approximately US$5.40 per million cubic feet), offers for a further 12 mmscfd of gas have been received at prices between US$5.20 and US$5.80 per million Btu (approximately US$6.25 to US$7 per million cubic feet) escalating at 3% per annum for both agreements,? the company said in a report.

The sale of a further 10 mmscfd of gas is expected to be agreed later this year after a revised reservoir model is submitted to the authorities following the completion of the new Kambuna development wells currently being drilled, the company said.

The Kambuna development wells are expected to produce at a total rate of 50 mmscfd, delivered at Pangkalan Brandan, about eight kilometres onshore and the site of a Pertamina gas plant and refinery. In addition to the gas, Serica will initially be marketing 4,000-5,000 barrels per day of condensate

Gas production is targeted to start by year-end.

Serica has a 65% working interest and operates the TAC.

The company also reported that consultan RPS energy had carried out new reserves report at Kambuna using the the results of the new 3D seismic data. The report estimates that the gross Proved plus Probable Reserves of the field are 119 bcf of sales gas and 9.9 million bbl of condensate, a total of 29.7 million boe, with an upside gross Proved plus Probable plus Possible Reserves of 45.6 million boe. The present estimate of Proved plus Probable Reserves is 15% higher than the estimate prepared by RPS Energy last year, before the 3D survey results were available. (denny)