Interra owns a 70% interest in the TMT Technical Assistance Contract ("TAC"). The TMT oil field is onshore and is located in South Sumatra. The owner of the remaining 30% and operator of the field is PT Retco Prima Energi.
Well TMT-48 is part of a 3-well infill development program that is anticipated to be completed in mid 2007. The drilling is being conducted by an external drilling contractor. The total cost of the 3 wells as completed producers is estimated to be US$3.7 million. Interra will be accountable for a 70% share of this cost (US$2.6 million) and this will be funded from existing funds on hand.
TMT is currently producing in excess of 700 barrels of oil per day from approximately 28 wells. Production is from multiple zones within two formations – the deeper Talang Akar ("TAF") sandstones and the overlying Baturaja ("BRF") limestones. Most of the producing reservoirs are the sandstones of the TAF and these will be the primary objective. Technical analysis of geologic, geophysical and engineering data has revealed that there exist several areas in which oil is not being efficiently drained by current producing wells. Three of the most prospective areas have been delineated and the optimum location has been sited for each.
Well TMT-48 will be drilled in a structural high position and on the upthrown side of a fault to two wells which on a combined basis have produced over 400,000 barrels of oil from the TAF reservoir. In addition to the secondary objectives within the BRF, potential shallow gas producing zones will also be evaluated by this well. The well is planned to be drilled to approximately 1,160 meters.
Interra estimates that the results of the infill drilling should be available in approximately two months' time. The Company will announce the results of the drilling operation as soon as they may be ascertained, together with the next well in the development drilling program.
Interra Resources Limited is a Singapore listed company engaged in the business of upstream petroleum exploration and production whose E&P activities include petroleum production, field development and low-risk exploration through strategic alliances and partnerships. Interra is positioning itself to become a leading regional independent producer of oil and gas.
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