Serica updates Indonesian ops
Tuesday, August 5 2008 - 07:59 AM WIB
Kambuna Field, Offshore North Sumatra
Field Appraisal and Development
Development drilling and testing
Significant progress has been made during the first half on development activities in the Kambuna field. The Kambuna Field production platform has been installed and three development wells have been drilled and tested with very positive results.
In Q2 2008, the Kambuna No. 3 and No. 4 deviated development wells were drilled from the Kambuna production platform, installed in Q1 2008 at the location of the Kambuna No. 2 well, the first of the three development wells drilled in 1H 2008. Kambuna No. 3 was drilled to a total depth of 7,483 ft true vertical depth below mean sea level ("TVDSS"). The well entered the target Belumai reservoir at a depth of 7,166 ft TVDSS and encountered gas-bearing sands over an interval of 107 ft with a net pay of 77 ft (67 vertical ft). Kambuna No. 4 was drilled to a total depth of 7,408 ft TVDSS. The well entered the Belumai reservoir at 7,140 ft TVDSS and encountered gas-bearing sands over an interval of 115 ft with a net pay of 107 ft (66 vertical ft). There was no indication of a gas-water contact in any of these wells.
By the end of the first half, all three Kambuna production wells had been successfully completed and tested. The Kambuna-2 well was tested at a stabilised rate of 33 mmscfd, the Kambuna-3 well was tested at a stabilised rate of 40 mmscfd and the Kambuna-4 well was tested at a stabilised rate of approximately 41 mmscfd.
The total maximum stabilised gas rate from the three wells was 114 mmscfd, together with an estimated 8,000 bpd of condensate. This rate was considerably higher than previously expected and exceeds the initial sales gas target of 50 mmscfd by a significant margin.
Sales contracts
In Q1 2008 Serica announced the agreement of commercial terms for the sale of 28 mmscfd to the state electricity generator, PT Perusahaan Listrik Negara ("PLN") and 12 mmscfd to PT Pertiwi Nusantara Resources ("Pertiwi"). In May, the heads of agreement of these two contracts were formally signed at the opening ceremony of the Indonesia Petroleum Congress in Jakarta, Indonesia. The contract with PLN will realise an initial price of approximately US$5.40 per thousand standard cubic feet ("mcf") escalating at 3% per annum. The contract with Pertiwi will realise an initial price of approximately US$7 per mcf, escalating at 3% per annum. In addition to these contracts, the Company expects to enter into a third contract to bring total contracted gas sales to 50 mmscfd. Serica anticipates that, when the third sales contract has been completed, the average realisation will be approximately US$6 per mcf. In addition to the gas, Serica initially expects to be marketing 4,000-5,000 bpd of condensate at a price close to that of light crude oil.
Forward plans
Serica is currently updating its Kambuna field reservoir model to investigate whether a further increase in planned sales volumes can be justified, particularly given the strong gas prices now being realised for domestic gas sales. Onshore and offshore facilities and a 14-inch offshore pipeline are to be installed later this year, with the pipeline targeted to be commissioned for production in December 2008.
Exploration
In the Kutai PSC in East Kalimantan, Serica is the operator of the Kutai Block and currently holds a 78% interest (reducing to 54.6% after completion of the transaction with Salamander Energy). The Company has contracts in place to acquire 3D and 2D seismic data this year. The 2D seismic survey crew has mobilised to East Kalimantan and acquisition of the 280 km onshore survey is due to commence shortly. The offshore 3D survey contract has been awarded and the vessel is expected to commence acquisition early in August. Discussions with rig contractors are underway to secure drilling capability for a multi well exploration programme in 2009. (end of excerpt)