Talisman?s oil, gas production in Indonesia down in Q2 2001

Canada?s largest independent oil and gas firm Talisman Energy Inc said Monday its daily average oil and gas production from Indonesian operation down from 20,874 barrel of oil per day (bpd) and 108 million standard cubic feet per day (MMSCFD) in the second quarter last year to 18,502 bpd and 89 MMSCFD respectively in this quarter.

The oil production drop, said the company in its second quarter results announcement, was due to natural declines, while gas production decreased with a lower recorded interest in the Corridor production sharing contract (PSC) and the temporary reduction in sales to Caltex.

According to the company, Caltex sales during the quarter were below the approximately 100 MMSCFD minimum take provision of the contract. Talisman had been recording a 40 percent interest in the natural gas production of Corridor PSC.

Effective January 1, 2001, the Pertamina ``carry'' was paid, making Talisman's reported interest reverted to 36 percent.

The company also reported liquids operating costs increased to C$8.04/barrel due to higher maintenance costs at Jambi and workovers at Tanjung PSC and lower reported volumes, while gas unit operating costs increased to C$0.41 per MMSCF as a result of lower volumes

The company said it has spent C$26.0 million on development during the first half of the year. Construction of the Corridor processing plant is expected to account for most of the Indonesian capital budget in 2001.

According to the company, the first phase drilling program for 2001 in Ogan Komering PSC has added 1,400 bpd (gross) and identified further locations which will be drilled later in 2001.

At Tanjung enhanced oil recovery (EOR), said Talisman, production has been maintained in excess of 6,000 bpd net to Talisman through a program of well stimulation.

At Corridor PSC, the development projects for Sumpal and Suban fields continued on schedule. The Suban-6 appraisal well confirmed the extension of the Batu Raja Reef encountered in Suban-4 into the central fault block of the Suban field, which may result in a substantial increase in reserves. Preparations to test Suban-6 and drill Suban-7 are underway.

Talisman operates Madura PSC, in East Java, Ogan Komering PSC in South Sumatra, Tanjung EOR in South Kalimantan and Jambi EOR in Jambi. Talisman also has 36 percent working interest in Corridor Block PSC operated by Gulf Indonesia Resources which supplies gas to Caltex?s oil production facilities in Riau and to Singapore starting mid-2003. (alex)