Lion Updates on Drilling, Resource Estimates at Seram PSC in Indonesia

Australia's Lion Energy Limited reported Wednesday the Lofin-2 appraisal well has reached 7,529 feet (2,295 meters) measured depth (MD) and 13.375 inch casing has been run and cemented. The well, which was drilled Oct. 31, has a planned total depth of 17,798 feet (5,425 meters) MD. Lofin-2 is located in the Seram (Non-Bula) PSC in eastern Indonesia with Lion holding a 2.5 percent interest.

The well, operated by CITIC Seram Energy Ltd., has progressed smoothly to date and is on-schedule. The forward program is to drill 12.25 inch hole to approximately 11,998 feet (3,657 meters) MD, at which point 9.625 inch casing will be set, prior to drilling ahead in 8.5 inch hole with the top of the primary objective, the Manusela Formation, expected at approximately 14,809 feet (4,514 meters) MD. This objective section is forecast to be penetrated in early-February 2015.

Kim Morrison, Lion’s CEO noted; ”We are pleased with progress on this exciting appraisal well testing the large Lofin structure. The Lofin-1ST discovery well, drilled in 2012, encountered a 525 foot (160 meter) hydrocarbon column in the Manusela carbonate objective without intersecting the water contact. Lofin-2 is designed to delineate the full extent of the hydrocarbon interval and has the potential to prove a material discovery for Lion.”

Crude Oil Lifting: A final crude oil lifting for calendar year 2014 is scheduled for Dec. 26-27, with an expected cargo of approximately 300,000 barrels of crude oil. This will bring the calendar year 2014 lifting total to approximately 1,000,000 barrels. Lion has a 2.5 percent equity interest.

Production: Average production to Nov. 30 was 2,838 barrels of oil per day (bopd), some 14 percent above Lion’s internal forecast average for the calendar year of 2,500 bopd.

Lofin Structure Overview and Resource Estimates

The Lofin Prospect is a thrust fold, four-way dip anticline, located 43 miles (70 kilometers) to the west of the producing Oseil oilfield. The structure is approximately 2.48 miles (4 kilometers) wide and 5.59 miles (9 kilometers) in length with mapped vertical closure in excess of 2,591 feet (790 meters).

The Lofin-1ST discovery well reached a total depth of 14,524 feet (4,427 meters) MD and intersected 525 feet (160 meters) of the Manusela carbonate reservoir. After acidizing, the well flowed 15.7 million standard cubic feet per day (MMscf/d) of gas and 171 bopd of 36.1 degree API oil or condensate, with a flowing wellhead pressure of 4,750 psi.


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