Indonesia: MEO Announces Farmout of Seruway PSC

MEO Australia Limited advises that its wholly owned subsidiary, Seruway Offshore Exploration Limited (SOEL) has a farmout process for up to a 50% participating interest in the Seruway PSC, offshore North Sumatra, Indonesia.

A farmout brochure inviting key industry representatives to consider farming into the PSC has been launched to coincide with the SEAPEX Farmout Forum in Singapore on 13th April.

The Seruway PSC contains existing gas and oil discoveries as well as prospects and leads. Three independent project areas have been identified within the PSC:

• Gurame is a gas and oil discovery which SOEL is planning to drill in late 2012. SOEL’s preliminary assessment estimates Gurame to contain P50 recoverable, prospective resources of 0.5 Tcf of low CO2 gas and 57 MMstb of oil and condensate.

• Kuala Langsa is a substantial gas discovery. The discovery well – Kuala Langsa-1 – was drilled in the adjacent onshore PSC. SOEL interprets that the highly productive carbonate reservoir is structurally highest and stratigraphically the thickest in the Seruway PSC. SOEL estimates that Kuala Langsa contains 5.3Tcf of raw recoverable prospective gas resources at the P50 level. CO2 content is estimated at 50-60%. The CO2 will need to be geosequestered with the nearby depleted Arun gas field providing an ideal storage facility.

• The Ibu Horst hosts multiple wells that recovered oil and gas. In 2012 SOEL completed 3D seismic acquisition over the horst to identify appraisal and exploration targets. Seismic processing is in progress. Early indications are that data quality is excellent and a number of high quality appraisal opportunities together with a number of prospects and leads are evident.

MEO’s CEO and MD Jürgen Hendrich commented on the announcement:

“We are quite overwhelmed with the number of unsolicited expressions of interest we have received for the Seruway PSC since we acquired it in June last year.

Our technical team has progressed their assessment of the PSC to the point where we are able to commence the farmout process with a rigorously prepared data package and a thorough understanding of the opportunities in the PSC.

While MEO’s business model is to farm out to cover drilling expenditure, the Seruway PSC offers a unique opportunity to evaluate a discovered resource (Gurame) with multiple existing wells. Under these exceptional circumstances, MEO is in the fortunate position of being able to consider retaining 100% interest through the drilling unless it receives a compelling farmin offer.

SOEL has identified a rig to drill the 2012 commitment well and is in advanced negotiations to secure a firm drilling slot. After careful consideration of potential drilling candidates, it was deemed prudent to target the Gurame discovery as it is in shallow water, has an existing 3D seismic survey and can be readily advanced towards development. The Ibu Horst 3D seismic survey is still in processing and many of the drilling candidates are in water depths exceeding the operational limit of the identified drilling rig. This survey will provide multiple candidates for the 2013 two well drilling commitment.”

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Subsea World News Staff , April 11, 2012;  Image: MEO Australia