Lion Energy Ltd. disclosed Monday it has received formal approval from the Directorate General of Oil and Gas (MIGAS) of the award of two separate unconventional joint studies over two highly prospective areas in Indonesia’s North and Central Sumatra Basins.
In North Sumatra, Lion will lead a joint study covering an area of 1,808.5 square miles (4,684 square kilometers) in the southeast of the basin. Under an agreement announced by Lion Nov. 19, 2014 Lion will operate the study with a 55 percent interest; and the partners in the conventional Bohorok production sharing contract (PSC), which partly overlaps the area of the unconventional Joint Study, jointly have 45 percent interest.
In Central Sumatra, Lion will conduct a Joint Study over an area of 956.7 square miles (2,478 square kilometes) covering part of the Bengkalis Graben, a major oil province in the east of the basin. Lion is the operator of the study with 75 percent, and the conventional rights holder in the partly overlapping area, has a 25 percent interest.
The studies will be undertaken with assigned universities and will refine Lion’s understanding of the key unconventional plays and prospective unconventional resources in the areas. This is anticipated to take approximately 6 months to complete; and on completion the joint study participants will hold certain priority rights, including the right to match the highest bid, for any resultant unconventional PSC.
Lion’s CEO Kim Morrison noted ”The award of these two unconventional joint studies is a major milestone for Lion and show we are delivering on our promises. Lion will operate the joint studies with the process providing a clear and cost effective pathway to being awarded unconventional PSC’s. The studies are over areas we regard as containing some of the most prospective unconventional plays in Indonesia.”
North Sumatra Unconventional Joint Study Area
Lion has been awarded an unconventional joint study in North Sumatra covering an area of 1,808.5 square miles (4,684 square kilometers) in the southeast of the basin. Under an agreement announced Nov. 19, 2014, Lion will operate the study with a 55 percent interest; and the partners in the conventional Bohorok PSC, which partly overlaps the area of the unconventional Joint Study, jointly have 45 percent interest.
The North Sumatra Basin is one of the major onshore basins in the SE Asian region with over 25 trillion cubic feet (Tcf) of gas and over 1.3 billion barrels of oil and condensate discovered. The Lion joint study area is located to the south of South Block A PSC in which Lion holds a 35 percent interest and is in close proximity to the first unconventional PSC in Indonesia awarded to Pertamina in 2013 (Sumbagut MNK PSC).
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