CBM Asia Reports Excellent Gas Quality at East Kalimantan

CBM Asia Development has said that excellent gas quality has been measured at the Kutai West Coalbed Methane Production Sharing Contract, located in East Kalimantan, Indonesia.

Newton Energy Capital Limited operates the Kutai West CBM PSC, in which CBM Asia holds an 18% working interest.

The gas compositional testing indicates that the CBM gas in the CBM-KW-01 well is of high quality, suitable for transport via pipeline or conversion to LNG.

CBM Asia also reports that the fourth and final well, CBM-KW-03, reached a target depth at 1,000 meters. The exploration well, designed to delineate the coal extent at the south-eastern edge of the syncline in the C 'sweet spot' encountered 11.5 meters of net coal as expected.

With the aerial extent, coal thickness, gas content and gas quality of the C sweet spot confirmed the Kutai West partners are now planning development activities for the next exploration phase which will likely include a production pilot.

The Kutai West block is adjacent to the Sanga-Sanga PSC, where BP, ENI, and partners (VICO) have been commercially producing coalbed methane and exporting it as LNG to north Asia since March 2011.

"With gas content levels exceeding 200 scf/ton and net coal thickness within sweet spot C of 25-32 meters we are excited to be moving toward the second exploration phase and begin the planning process for the production pilot program," CBM Asia President and CEO Alan T. Charuk said. "BP's success in delivering CBM gas to the Bontang LNG and securing local gas sales contracts in the range of 7.50/Mcf underscores the potential of the Kutai West PSC."