Premier Oil 1st Half 2014 Operational Review - Indonesia

abarrelfullabarrelfull wrote on 22 Aug 2014 11:15
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The first half saw a strong performance from Natuna Sea Block A with record daily production rates realised. The Anoa field continued to exceed its contractual share of the first Gas Sales Agreement (GSA1), while additional gas sales from the Gajah Baru field to the domestic market commenced in June. Premier also achieved notable exploration success in Indonesia with the Tuna Block wells discovering 100 million (gross) barrels of oil equivalent (mmboe).

Production and Development
Gas sales from Indonesia exceeded expectations during the first half of 2014. This was driven by strong sales from the Anoa field which averaged 144 billion British thermal units per day (BBtud) (2013: 144
BBtud) and accounted for 48 per cent of deliveries under GSA1 (against a contractual share of 39.4 per cent). Sales of Gajah Baru gas dedicated to GSA2 averaged 84 BBtud (2013: 81 BBtud). In April, the Anoa and Gajah Baru fields on the Premier-operated Natuna Sea Block A achieved a peak production rate of 391 BBtud, a new record for the assets.

Gas sales from the non-operated Kakap field averaged 29 BBtud (gross) (2013: 34 BBtud) during the first half. Gross liquids production from the Kakap field averaged 3.8 thousand barrels of oil per day (kbopd) (2013: 3.7 kbopd) and 1.6 kbopd from Anoa (2013: 2.0 kbopd). Overall, net production from Indonesia in the first six months was 14.0 kboepd (2013: 14.1 kboepd), on a working interest basis.

Post period end, additional gas sales of up to 40 BBtud from the Gajah Baru field to the domestic market commenced under the DSA. Gas delivered under the DSA replaces gas previously contracted to Batam Island, Indonesia, from the Natuna Sea Block A under GSA3 and GSA4. DSA deliveries will be made until the domestic pipelines are constructed and the GSA3 and GSA4 contracts commence.

Good progress was made during the first half on our further Natuna Sea developments. The Pelikan and Naga gas field platforms were installed and tied into the Gajah Baru platform. Development drilling of the Naga wells is under way. Pelikan and Naga will be brought on-stream to backfill our existing contracts and, when the opportunity arises, to further increase our market share of GSA1. First gas from these new facilities is expected in the second half of 2014. Elsewhere on Natuna Sea Block A, plans are in place to tie-in the 2012 Lama WL-5X gas discovery well to the Anoa production facilities next year, resulting in additional volumes being delivered into Singapore under GSA1.

In June, Premier sold its 41.67 per cent non-operated interest in Block A Aceh onshore Indonesia for an after-tax consideration of US$40 million, as the group continues to focus its capital and people on the higher return projects in its portfolio. Completion of the sale, which is subject to government approvals, is expected later this year.

Exploration and Appraisal
Premier drilled three exploration wells in Indonesia during the first half: the Kuda Laut-1 well and Singa Laut-1 well on the Premier-operated Tuna Block and the Ratu Gajah-1 well on the Premier-operated Natuna Sea Block A.

The Kuda Laut-1 well discovered 183 feet of net oil-bearing reservoir and 327 feet of net gas-bearing reservoir. The well was then side-tracked to test the Singa Laut prospect in the adjoining three-way dip closed structure and penetrated 177 feet of net gas-bearing reservoir quality sands. The two discoveries, which are estimated to contain around 100 mmboe (gross), have a high natural liquid content. Assessment of the commercial viability of the discoveries is now under way.

While the Ratu Gajah-1 well flowed gas to surface during testing, less sandstone reservoir than expected was encountered and the discovery itself is sub-commercial. However, the results of this well have been integrated into the group’s broader understanding of the Lama play and, consequently, thicker sands have been identified at the basin margin. We continue to mature and high grade further Lama play prospects in our portfolio with preparations well advanced for the appraisal of the Anoa Deep discovery, scheduled for the first half of 2015.


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