Cue Energy advised that the Indonesian regulator has approved Cue's 40% interest in the Mahakam Hilir PSC. SPC Mahakam Hilir Pte Ltd (SPC) is the PSC operator and will hold the remaining 60% interest. As previously advised, under the Farmin Agreement Cue will earn its interest, by refunding 40% of the past costs to SPC which is estimated to be around USD 4 million. This will be funded from Cue's existing cash reserves and be paid by the end of October.
The Mahakam Hilir PSC covers an area of 344km2 in the prolific Kutei Basin, Eastern Kalimantan. The Sambutan gas/oil and the Sei Nangka and South Perlang oil fields are all located on western boundary of the PSC. The Sambutan field was discovered in the early 1900s and is currently producing oil and gas from Miocene-aged reservoirs. The South Perlang and Sei Nangka fields are currently shut-in. No modern wells have been drilled in the PSC.
In 2009 SPC acquired 200km of new 2D seismic in the PSC. Interpretation of these data in conjunction with evaluation of newly available well-logs from the adjacent Sambutan field, reprocessed vintage seismic data and field mapping has identified five prospects.
Naga Selatan Prospect Summary
Naga Utara Prospect Summary
Land for the well sites is being acquired and tenders for rig and service contracts are being evaluated with a view to spudding the first well before the end of 2011. Further updates on drilling progress will be provided at critical milestones.
The participants and their respective interests are:
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