Significant CBM gas discovered at Kutai West PSC

By Romel S. Gurky

Laboratory tests indicate the coal bed methane (CBM) content of the Kutai West block in East Kalimantan is much higher than expected, Canada-listed CBM Asia Development Corp. said on Tuesday.

In a statement filed with the Toronto Stock Exchange, the firm said it had been informed by the operator Newton Energy Capital Limited that final gas content lab reports have been completed for the first CBM exploration test well (CBM-KW-02) at the Kutai West CBM Production Sharing Contract (Kutai West CBM PSC) block.

"These final gas content results are significantly above our expectations," noted Scott Stevens, Chairman of CBM Asia, in the statement.

"We look forward to confirming these results in the second CBM test well currently being drilled. As mentioned in our previous press release the test results are supported by Dart Energy's exploration results at the Sangatta West PSC to the north and VICO's Sanga-Sanga PSC which lies adjacent to the east," he said,

CBM Asia holds an 18 percent working interest in the Kutai West CBM PSC.

Independent Australian-based contractor GeoGAS desorbed a total of 17 samples from the CBM-KW-02 well. Gas content of pure coal samples (ash content less than 15 percent) ranged from 7.31 to 8.27 m3/tonne (234 to 265 scf/ton), when reported on a dry, ash-free basis. Gas quality was excellent, averaging 96 percent methane (CH4) with less than 3 percent CO2 and other inerts, the company said, adding Sorption isotherm data indicate the coals are close to saturated with methane.

On March 15, 2012 the drilling rig spud the second of four planned core wells at the Kutai West PSC and is currently drilling ahead below 500 meters.

The company said VICO Indonesia, operated by BP and ENI, as well as the Indonesian government have reported that commercial CBM production began in March 2011 from the adjoining Sanga-Sanga PSC and is being exported from the Bontang LNG facility to North Asian consumers.

Editing by Johannes Simbolon