(EnergyAsia, March 10 2011, Thursday) — Canada’s CBM Asia Development Corp (CBM Asia) said its partner, MedcoEnergi, has reported mobilising a workover rig to a well at the Sekayu coalbed methane exploration project in South Sumatra in Indonesia.
Medco plans to install a downhole pump and zone isolation packer to dewater the Palembang B & C and Pangadang A coal seams at the CBM-SE-02 well to provide data on deep-radius reservoir permeability and water composition. Medco also has contracted Weatherford International to test for gas saturation testing at the well.
The Indonesian company will begin checking the coal section for gas content and permeability testing in three other CBM test wells located in the deeper portion of the Sekayu project.
CBM Asia said the CBM-SE-02 well has provided data on coal seam thickness and permeability, while the upcoming coring of the CBM-SE-01, -03 & -04 wells will help define CBM resources on the block, providing critical input in support of its planned NI 51-101 resource estimate.
Subject to approval by the Toronto Stock Exchange Venture, CBM Asia said it has granted 2,726,000 stock options with an exercise price of 0.17 per share and an expiry date of five years to employees and consultants. The company is making application to re-price 1,666,000 previously issued options with an exercise price of 0.17 per share and an expiry date of five years.
Of the total options to be re-priced, 1,433,000 are for directors and officers which are subject to shareholder approval.
Listed on the Jakarta Stock Exchange, MedcoEnergi is Indonesia’s largest independent oil and gas company with an interest in power generation and renewable fuels.
Focusing on developing coalbed methane (CBM) resources in Indonesia, CBM Asia has signed a binding letter of intent to acquire a participating interest in a production sharing contract (PSC) on a 58,349-hectare block located in the South Sumatra Basin where initial exploration drilling of a production test well started in 209. The company has committed to fund an initial US$3.25 million in exploration expenditures on the Sekayu PSC to prove reserves and submit a development plan to the Indonesian government.
CBM Asia also has an 18% net working interest in a PSC for CBM on a 76,000-hectare block located in the Kutai Basin in East Kalimantan. Indonesia has one of the largest CBM resources in the world with a potential 453 trillion cubic feet in-place, more than double the country’s natural gas reserves.