Production Begins at Langsa

Matrix Oil NL announced that it began flowing oil from its 90%-owned Langsa Technical Assistance Contract area in the North Sumatra Basin Offshore Indonesia.

Matrix has two wells coming into production, the L1 and L2, that will gradually be opened to full pressure over the "startup" period of the next few days.

The Langsa oil field should stabilize at a total final flow rate of between 8,000 – 8,500 bopd from the two wells, generating gross annual revenue of about US$55 million with an average oil price of US$18 per barrel.

Matrix Managing Director, Mr Brian Hockney, said that the L1 well was opened to begin flowing just before midnight last night into the MV8 Langsa Venture FPSO anchored onsite.

The L1 well has been opened up to stabilize first, with the L2 well expected to come on stream over the next day.

During initial flow tests last month, when the two wells were re-entered and opened up by Transocean Sedco Forex's semisubmersible, Sedco 601, the L1 well flowed at a rate of 4,200 bopd, and L2 flowed at 3,637 bopd.

"The break even point for Matrix with production at 8,000 bopd is an oil price of about US$11 per barrel," said Mr Hockney. Plans are underway to bring into production the third "H3" well early next year to increase production to about 10,000 bopd. Flow lines have already been laid from the wellhead to the MV8 Langsa Venture FPSO for tie in when re-entry of the third well is completed.

The MV8 Langsa Venture was anchored on site early this month for pre-testing ready for commissioning. It is capable of storing up to 230,000 barrels of oil, equivalent to about three weeks of production from the Langsa contract area which has total proven and probable reserves of about 33 million barrels.

The Langsa field has come into production within a week of its planned first oil date.