Wortel gas sale contract signed with Indonesia Power

Australian oil, gas firm Cue Energy Resources Limited announced Monday it had signed a contract for the sale of all the Wortel field gas in Sampang PSC, offshore East Java to PT Indonesia Power (IP). The gas will be used by IP to generate power at the Grati power plant in East Java.

In order to develop the Wortel well, Cue will build a small wellhead platform, two gas production wells and an approximately 10 kilometre pipeline to the Oyong facilities where the gas will be transported down the existing pipeline to Grati.

The first gas production is expected to come around the end of 2011. The Wortel development is estimated to cost US$100 million gross, with Cue's share amounting to $15 million, the company said.

Recoverable gas at Wortel is currently estimated at 118 billion cubic feet gross in a mid case with Cue?s share approximately 16 BCF.

?Wortel gas production will provide a significant welcome addition to Cue?s revenue from oil and gas production from the Oyong field, where the oil production rate is exceeding prediction and will most likely result in an increase to field oil reserves,? said Cue?s CEO Bob Coppin.

Gross gas production rates from Wortel and Oyong are expected to be around 90 mmscf day at plateau rates. Oyong is currently producing approximately 3500 barrels of oil per day and about 60 mmscf/d of gas, gross.

The Wortel field is located in the offshore Sampang PSC, approximately 7 kilometres west of the producing Oyong field.

Participants in the Sampang PSC are: Santos Sampang Pty Ltd (operator) 45%, Cue Sampang Pty Ltd 15% and Singapore Petroleum Sampang Ltd 40%. (giok)