"Serica made great progress in 2005, achieving one hundred percent success with the drill bit and a successful listing on London's AIM market, giving it investment community support in Europe and Canada and a strong financial position.
Serica's Board expects to give full project sanction for development of the Kambuna Field, offshore North Sumatra, Indonesia in the near future. Serica is operator of the Kambuna Field, holding a 65% interest, and this development is integral to the Company's plan to move its operated assets in Indonesia into the production phase and satisfy a growing market in the region. The field is expected to come onstream in 2008 at an initial rate of 50 million cubic feet of gas per day and 5,000 barrels per day of condensate. The full extent of the Kambuna Field has yet to be defined and the Company will carry out a 3D seismic survey in 2006 to identify further extensions. This is a major step forward for Serica and has the potential to be a material producing asset in the medium to long term.
As part of the development plan we intend to fast track the development of the field using 'dry' wellheads and a Floating Production Storage and Offtake vessel ("FPSO"), which offers significantly lower drilling and production costs than a subsea solution.
We also plan to construct the infrastructure to deliver the gas to market, and the terms of the gas sales contract are under negotiation. We estimate there will be a gas market shortfall in North Sumatra of around 100 to 200 mmscfd by 2010. In addition to the Kambuna field development Serica has also submitted a Plan of Development for the Tanjung Perling field in the neighbouring Asahan Block which Serica also operates. We will continue to explore for additional gas supplies to add to the Kambuna and Tanjung Perling developments with nine prospects and leads already identified.
With a high impact exploration programme across Indonesia and the UK due to commence shortly and near term development in Indonesia on track for first gas in 2008 Serica is well placed to generate growth for shareholders."
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