Sampang JV Approves Project to Extend Field Life by 2 Years to 2020

Australia's Cue Energy Resources Ltd. reported Thursday that the Sampang Joint Venture, comprising field operator Santos Ltd., Singapore Petroleum Co. and the firm, has approved the Sampang Sustainability Project (SSP) located offshore East Java, Indonesia.

The SSP initiative, which is subject to government approval, will involve switching the Oyong and Wortel fields to a gas only production system and ceasing uneconomic oil production. Operator Santos indicated that production forecasts based on implementation of the SSP will result in an increase of 2P reserves of around 17 billion cubic feet (Bcf) associated with the extended life of the Wortel and Oyong fields.

The current project schedule estimates switching to gas only operations in September 2017, allowing both the floating production storage offloading (FPSO) vessel, Seagood, and the floating storage offloading (FSO) vessel, Surya Putra Jaya, to be decommissioned in the fourth quarter of 2017. This should reduce total annual production costs from around $50 million this year to around $22 million by 2018.

Meanwhile, the joint venture has reviewed other Mundu Formation prospects in the Sampang Production Sharing Contract (PSC), including Paus, which is believed to be low risk and potentially a drilling candidate in 2018. The joint venture has not make a decision to proceed with this near term exploration potential but if drilling is approved and is successful, Paus could be tied back through the Oyong facilities and further extend the gas production from the Sampang PSC for many years.



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