Cue Energy Resources (CUE) disclosed Monday that its wholly owned subsidiary Cue Kalimantan Pte Ltd., the operator of the Mahakam Hilir Production Sharing Contract (PSC), has contracted a rig for the drilling of the forthcoming Naga Selatan-2 well in Indonesia. Cue holds a 100 percent interest in the Mahakam Hilir PSC which is located onshore in the Kutai Basin, Indonesia.
Naga Selatan-2 is a vertical exploration well to be drilled in the Mahakam Hilir PSC on the Pelarang anticline situated approximately 1.6 miles (2.6 kilometers) southeast of Naga Selatan-1. The Pelarang anticline lies approximately 6.2 miles (10 kilometers) west of the Sanga Sanga Anticline, which contains the prolific Mutiara, Pamaguan and Louise (Sanga Sanga) Fields.
The well is designed to test the updip potential of the Late Miocene Balikpapan and Early-Middle Miocene Pulau Balang reservoirs which were penetrated by the Naga Selatan-1 well drilled by SPC Mahakam Hilir in 2012. Cue participated in that well as a 40 percent joint venture partner. Hydrocarbon shows were recorded in several sands throughout this interval. Recent detailed surface mapping, in conjunction with new seismic interpretation, has been used to position the Naga Selatan-2 well at or near the axial crest of the anticline in the vicinity of known oil seeps.
The Naga Selatan-2 Prospect has been estimated by Cue to contain a prospective mean recoverable resource of 37.8 million stock tank barrels (MMstb) of oil. The technical chance of success for this prospect has been estimated to be 35 percent.
The well is planned to spud in early January 2016 and drill to a total depth of 2,240 feet (measured depth or MD) in 15 days.
Forward plans include immediately applying for a 4 year extension to the exploration phase of the permit upon completion of the Naga Selatan-2 well, as well as testing and appraisal of the discovery in the success case.
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