Andalas Energy and Power Farms Into Indonesia Gas Concession

Andalas Energy and Power has conditionally entered into a farm-in agreement for the Tuba Obi East Technical Assistance Contract (TAC), which is located in the South Sumatran basin in Jambi province, Sumatra, Indonesia.

Andalas will acquire a 30 percent direct working interest in the concession through the execution of a single well work programme.  The work programme includes the completion of a geological, geophysical and reservoir study along with the drilling and flow testing of a single well to assess the deliverability, recoverable volumes, and gas quality in the Air Benakat formation.

Tuba Obi East is located in the South Sumatran basin approx. 30km north-west of Jambi city.  The wells previously drilling in the concession have tested gas in the key South Sumatra hydrocarbon bearing formations, namely, the Air Benakat Formation (‘ABF’) and the Talang Akar Formation (‘TAF’).  A total of six wells (three wells within the concession and a further three just outside) have been drilled through these zones, with a number having been logged across the ABF and TAF.  Several have also flowed gas to surface.

“The signing of this agreement follows the Letter of Intent announced on 3 February 2016 and secures ADL’s foundation gas asset.  We are keen to take full advantage of the opportunity Tuba Obi East now affords Andalas, and we regard it as the base upon which a profitable Indonesian gas and power business can be built,” Andalas CEO, David Whitby, said. “TOE has all the essential features to be a successful first asset for the company.  It has gas proven by two wells into the reservoir zone that has been defined on 3D seismic and confirmed by well logs, all whilst located in a prolific hydrocarbon basin.”

Block operator PT Akar Golindo and Andalas will jointly operate the well work programme, which is expected to cost around $1.075 million.  Andalas has also agreed to pay a further sum of $500,000 to PT Akar Golindo if the concession is renewed beyond its expiry date of 15 May 2017.