Sugih to deepen Selong-1 exploration well

By Ruli Setiawan

IDX-listed PT Sugih Energy Tbk (Sugih) announced that the Selong-1 exploration well in Jambi province would be deepened by approximately 300 feet.

The Selong-1 well is the first exploration well to be drilled at the Lemang PSC block (Lemang block), the company said in a press statement on Tuesday.

The decision to deepen the well comes after the operator penetrated the crystalline basement by approximately 280 feet in exploration drilling operations, and completed cementing of 7-inch casing of the well.

Additional drilling of the Selong-1 commenced on December 2, and is expected to take 7 days to complete. Additional testing and analysis is expected to take an additional 20 days.

President Director of Sugih Energy, Andhika Anindyaguna, said that the decision to deepen the Selong-1 exploration well further reinforced their confidence in the potential for a hydrocarbon discovery in the well.

?We are eager to share the results of exploration drilling with our shareholders, and will do so following additional drilling and analysis. We expect to disclose this information in December 2012,? he said.

The Lemang PSC block, which is located in Jambi province, Sumatra, is adjacent to the Jabung block, operated by PetroChina, an already-producing block. It was awarded in 2007, and remains valid until 2037.

Based on volumetric studies from international petroleum consultancy DeGolyer & MacNaughton (D&M), the Lemang block holds an estimated 511 million barrels of oil and 467 billion cubic feet of gas (gross recoverable prospective resources).

Sugih holds a 49 percent non-operating participating interest in the Lemang block through its subsidiary, Eastwin Global Investments Ltd (Eastwin). Eastwin is a natural resource-focused investment company with specific focus on the Indonesian market. Sugih acquired 100% ownership of Eastwin in February 2012.

Editing by Benget Besalicto Tnb.