Sound expects C. Kalimantan gas sales deal to be sealed by year-end

Sound Oil expects C. Kalimantan gas sales deal to be sealed by year-end

UK oil firm Sound Oil PLC expects to conclude a gas sales agreement by year-end for Karendan gas field in Bangkanai PSC, onshore Central Kalimantan.

The company said discussion are now taking places with a number of potential gas buyers and independent power producers.

Plan of Development (POD) for the Kerendan gas field was approved in 2006. The POD calls for the supply of 133 BCF over 20 years at a maximum rate of 20 MMCFD. The development plan will include re-entry of existing wells and up to five new development wells.

The company also reported that the block?s operator will start preparation to drill the Lahei-1 exploration well in the fourth quarter of 2008. The well has P50 resource potential of 940 BCF. It said the drilling of the well is a requirement to ensure the extension of the PSC for a further twelve months.

?Parallel with the drilling activity we will acquire 300 km of new seismic data over the large multi-trillion cubic feet gas potential Jupoi structure in the south of the block during the last quarter of 2008,? the company said, adding that the Bangkanai PSC participants are finalizing the details of an agreement to establish a Joint Operating Company (JOC) to conduct future operations on the PSC. The JOC will help streamline both exploration and development activity.

It also reported that the company is in advanced stage to farm-out part of its interest in the PSC with sixteen companies, including some major operators, had shown interest.

Sound Oil has 35 percent interest in the PSC with operator Elnusa Tbk controls 50 percent interest. The balance is held by Medco Energi. (alex)