AED announced that AED Rombebai B.V. as 100% operator of the Rombebai Block in Papua, Indonesia has received an extension of the exploration period for its current production sharing contract (PSC) until July 15, 2013.
AED Oil Executive Chairman Mr David Dix said, "This extension is a very positive event for the Company. It provides us with increased certainty of control over an asset with outstanding commercial potential. We believe this certainty will leave us well placed to attract and negotiate with potential farm-out partners who can work with us to develop this world-class prospect."
The Rombebai prospect contains the Gesa structure, which is a world-class prospective resource where AED is targeting in excess of 7 Tcf of gas. In addition to the significant gas potential within Rombebai, we believe there is also the real possibility of a major oil find.
Rombebai has an excellent path to market with the potential to become a major liquefied natural gas development similar to the nearby BP Tangguh LNG development. AED has become increasingly optimistic about Rombebai. Our initial assessment had suggested the presence of biogenic gas only; however recent analysis of previous drilling results suggests the presence of hydrocarbons.
New seismic data and interpretation work has significantly increased the prospectivity of the Gesa structure. Recent studies suggest oil as well as thermal gas potential indicated by oil fluorescence in Gesa 1 and 2, and from oil analyzed in hydrocarbon seeps.
Our 2011 geological and geographical program will focus on reprocessing data and performing detailed AVO studies to better quantify the hydrocarbon type and distribution, as well as sampling oil seeps in the region.
AED plans to recommence farm-out discussions with interested parties, with a view to conducting drilling operations at the Kare-1 well upon obtaining the required forestry permits.
AED believes that the additional time will allow the following activities to be performed before the time at which for a Plan of Development is required to be submitted in respect of the Rombebai Block:
Key terms of the extension are as follows:
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