Sugih seeks to increase gas output in Selat Panjang block
Thursday, July 13 2017 - 07:53 AM WIB
IDX-listed PT Sugih Energy Tbk said it plans to increase gas production at the Selat Panjang block in Riau Province through the drilling of new wells and re-working of existing wells.
The company said in a statement on Wednesday it will also improve cost efficiency to adjust to the current weak oil price condition.
Under the planned expansion of the Selat Panjang PSC, the company said it will drill a total of 10 wells until 2019. Under its approved 2017 work program and budget, the company plans to drill two wells. Next year, it plans to drill three wells, and five wells in 2019.
Sugih said it has set a target to increase production of gas to 30 mmbtu through the expansion plan of Selat Panjang PSC. The company did not provide comparative figure.
Sugih estimates total capex required for the drilling of 10 wells until 2019 is US$60 million and opex for the first year operation of $ 2.4 million.
Sugih said it will need fresh funding to support the expansion plan of Selat Panjang PSC therefore, the plan is to issue 3-year debt instrument.
Sugih said it sees brighter future for the sale of gas in Indonesia due to high demand to fuel the power plants.
Sugih, which owns 55 percent of participating interest in the Selat Panjang PSC, expects the increase of gas production to boost the revenue in the next four years.
Sugih expects its two operating and producing oil and gas blocks, namely Lemang PSC and Selat Panjang PSC, will be generating steady cash flow by 2018.
Editing by Reiner Simanjuntak