Neon Energy Limited disclosed Thursday that the field operator of Tanjung Aru Production Sharing Contract (PSC) in the Kutei Basin, offshore East Kalimantan, Indonesia is currently tendering for a seismic vessel to undertake a survey of the block as part of pre-drill exploration activities.
"Operator KrisEnergy is currently tendering for a 3D seismic vessel to acquire new data within the block early this year, the aim of which is to firm up a drilling location on the block," Neon Energy's Managing Director Ken Charsinsky said in a market briefing posted on the Australian Securities Exchange.
Upon completion of the seismic survey, the Tanjung Arun joint venture - comprising KrisEnergy Ltd. (operator with 43 percent), Neon Energy (42 percent) and Natuna Ventures Pte Ltd. (15 percent) - will have fulfilled its obligation to the Indonesian Government and have the option of entering into the second phase, which require a well to be drilled.
"Consistent with our strategy the intent is to farm down equity in order to fund that drilling obligation. In addition the Ruby gas field to the south of our block recently commenced production. This provides an excellent opportunity for early monetization of a Tanjung Aru gas discovery, as the gas pipeline runs adjacent to our block," Charsinsky said.
"The economics of gas development in the area are also supported by excellent 'frontier' fiscal term, and very strong local gas prices. There are two gas discoveries on the block from 2002, deemed to be non-commercial at the time due to the prevailing low gas price. With gas pricing at a much higher level now,these resources may offer potential for development as tie-backs to any new discovery," Charsinsky added.
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