Continental Energy Corporation plans to conduct a large onshore 3D seismic survey to evaluate recent oil finds by its 18%-owned Indonesian subsidiary Continental-GeoPetro (Bengara-II) Ltd. ("CGB2") in the Bengara-II block East Kalimantan, Indonesia.
The recent completion of the drilling of four wells in the Bengara-II Block comes at the recently ended initial 10-year exploration period of the PSC on Dec. 4, 2007, and thereby satisfies the entire work program and expenditure obligations of CGB2 under its Bengara-II production sharing contract (PSC).
The technical information provided by drilling and testing results to date confirms the presence of an oil accumulation. However the data is not yet adequate to conclusively demonstrate the extent of the oil accumulation or that it has sufficient size of oil reserves to economically justify a full commercial development. Further technical information is required prior to commencing development.
CGB2 has prepared a preliminary plan of development for the Seberaba discovery based upon drilling and testing results from the Seberaba-1 and 4 wells. Testing of the Punga-1 well and further testing on the Seberaba-3 well is still in progress and is expected to be completed in early 2008. In addition to these well test results, CGB2 feels additional technical information is needed prior to finalizing the formal plan of development and submitting it for approval to Indonesian oil and gas authorities. Approval of the formal plan of development will automatically invoke the final 20-year production period of the Bengara-II PSC through December 4, 2027.
CGB2 has submitted the preliminary plan to the Indonesian authorities together with a request for additional time of up to three years to implement the plan and thereby obtain the additional data needed to further appraise and prove up the Seberaba discovery prior to completing and submitting the formal plan of development. The centerpiece of the preliminary plan is the acquisition of a 3D seismic survey over a 400 square kilometer area of the Bengara-II block completely covering the Seberaba-Punga structure and also covering the adjacent prospective areas. CGB2 feels the 3D seismic survey is needed to more accurately delineate the extent of the field and to confirm CGB2's initial opinion that there are sufficient oil reserves to justify a commercial development.
The 3D seismic survey will also aid in development planning and enable more precise well placement to maximize ultimate oil recovery. The 3D seismic is planned to commence in 2008 soon after its approval and is expected to take approximately 18 to 24 months to prepare, shoot, process, and interpret at an estimated cost of about $ 12,000,000.
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