Medco Continues Progress at Sekayu, South Sumatra
CBM Asia Development Corp has announced that Medco Energi has penetrated over 230 feet of net coal in its most recent exploration well at the Sekayu coalbed methane production sharing contract in South Sumatra.
Actual coal thickness exceeded the pre-drill prognosis by 50%. All coal seams exhibited strong gas shows. Preliminary gas contents from the CBM-SE-03 well correlate with equivalent coal zones in the two previous Medco Energi test wells, based on well-site desorption underway by contractor Core Laboratories.
Medco Energi has now drilled three test wells across the Sekayu block, indicating that thick coal seams with favorable gas content underlie a significant portion of its 583-km(2) total area.
CBM Asia's Chairman Scott H. Stevens noted, 'The three CBM test wells drilled to date demonstrate that very thick coal seams with favorable gas content underlie a significant portion of the 583-km(2) Sekayu PSC. CBM reservoir properties appear to be consistent over a wide area. This is a good indication that a large, high-quality, and potentially commercial CBM deposit may be present in the block. Gas market conditions continue to improve in South Sumatra, with nearby oil & gas operators including Talisman Energy reporting strong natural gas sales prices of over USD6.00/Mcf.'
CBM Asia Development Corp. has entered into a binding letter of intent to acquire a participating interest in a production sharing contract (PSC) for CBM on the 583-km(2) Sekayu block located in the South Sumatra Basin where three exploration wells are being drilled by Medco Energi, following initial exploration drilling of a production test well in the second half of 2009. The Company has committed to fund an initial US$3.25 million in exploration expenditures on the Sekayu PSC to prove reserves and submit a Plan of Development to the Government of Indonesia.
Sekayu Block Interests of the CBM Asia, Ephindo and Batavia Energy Corp. are held in South Sumatra Energy, Inc.
Indonesia has one of the largest CBM resources in the world with a potential 453 trillion cubic feet in-place, more than double the country's natural gas reserves (Stevens and Hadiyanto, 2004).
Since 2008 more than 30 CBM PSCs have been granted by the Government of Indonesia, representing exploration commitments of over US$100 million during the next three years. In addition to CBM Asia, other companies active in CBM exploration in Indonesia include BP, Dart Energy, ENI, ExxonMobil, Medco, and Total.
Source: CBM Asia Development Corp.
