Australia's Dart Energy has been awarded the onshore Bontang Bengalon coalbed methane (CBM) block in East Kalimantan, Indonesia, and the company is expecting to sign a production sharing contract (PSC) with the Indonesian government in the second week of October this year, Dart's COO Nathan Rayner told Rigzone in an interview Friday.
The block, sited in the middle of the Kutei Basin, spans an area of 159 square miles (411 square kilometers). It is divided into two areas: the southern part being located adjacent to the Bontang liquefied natural gas facility, and the northern part adjacent to the Sangatta West PSC.
Dart will be the operator of the block with full working interest. The PSC term will be for 30 years. In the initial three year exploration period, Dart intends to drill three core wells and one pilot well.
Commenting on the timeline of the project, Rayner said that the company will be meeting Indonesia's oil and gas regulator BP Migas to decide on the project's development budget. Upon agreeing on the budget, Dart will be able to start its drilling program, likely in 3Q 2013. Dart intends to submit its plan of development (POD) for approval at the end of 2014 and it hopes to be able to start commercial production by 2015.
A POD is the approval that foreign operators require from BP Migas in order to move their CBM projects from the exploration into the development and commercial phase.
The company considers the Bontang Bengalon block to be highly prospective, given the significant exploration and pilot appraisal work undertaken at the neighboring Sangatta West block, where CBM reserves and commercial viability have already been established. The Sangatta West block covers an area of 30 square miles (77 square kilometers) with 129 billion cubic feet of prospective resources. Dart is the operator of the Sangatta West PSC and it has a 24 percent interest in the block.
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